What is Restrictive Trade Practices (RTP)?

A Restrictive Trade Practice (RTP) is generally one which has the effect of preventing, distorting or restricting competition. In particular, restrictive trade practices are those which:(a) Tends to obstruct the flow of capital or resources in production.(b) Tend to manipulate of prices, conditions of delivery or market supply of goods and services in a way as to impose unjustified costs, or restrictions.

Some of the Restrictive Trade Practices enumerated in the MRTP Act are:

  • Refusal to deal
  • Tie-up sales
  • Full line forcing
  • Exclusive dealings
  • Price discrimination
  • sale price maintenance
  • Area restriction

The Restrictive Trade Practices under the provisions of MRTP Act are deemed legally to be prejudicial to public interest. The MRTP Act regulates Restrictive Trade Practice (RTP) in the following three ways:

  • Registration of RTP agreements (under Section 33, MRTP Act, 1969).
  • Prohibiting sales prices.
  • Persons indulging in restrictive practices are restrained by MRTP commission after holding inquiry. (under Section 37, MRTP Act, 1969).

Under Section 38 of MRTP Act, 1969 provides gateways under which certain restrictive trade practices might be permissible.

Tags: B.Com

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