MRTP Full Form

The MRTP Act was enacted to ensure that the economic system’s operation does not result in the concentration of economic power in the hands of a few. An overview of the MRTP Act has been provided in this article, covering key characteristics, key clauses, and revisions that have been made throughout time. It was eventually abolished and replaced by the Competition Act of 2002, India’s first market regulation law.

MRTP Act

The Monopolistic and Restrictive Trade Practices Legislation (MRTP) was implemented in 1969. This law was designed to ensure that the economic system’s operation does not result in the concentration of economic power in the hands of a few. Therefore, ensure that monopolies are controlled and that monopolistic and restrictive business practices are prohibited. Except for Jammu & Kashmir, the MRTP Act covers the whole country.

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Dutt Committee’s Suggestion

The MRTP Act was passed in 1969 to ensure that economic power was concentrated in the hands of a few wealthy individuals. The statute was put in place to prevent monopolistic and restrictive business practices. Except for Jammu and Kashmir, it covered all of India.

The act’s Goals and Objectives are as follows

• To ensure that the economic system does not result in the concentration of economic power in the hands of a few wealthy individuals
• To ensure that monopolies are controlled, and
• To make it illegal to engage in monopolistic and restrictive commercial practices

The Act shall not apply to the following

• Any venture that the government firm owns or controls
• Any government-owned or controlled enterprise
• Any undertaking owned or managed by a corporation (not one formed by or under any federal, provincial, or state law)
• Any trade union or other group of workers or employees created to ensure their reasonable protection as workers or employees
• Any industry-related activity whose administration has been taken over by a person or group of people with powers granted by the central government
• Any business owned by a cooperative society created and registered by federal, provincial, or state law

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Unfair Trade Practices

Unfair business practice Means a business practice that employs a dishonest or misleading practice to promote the sale, usage, or supply of products or services.

What are unfair trading practices?

• Falsely implies that the items are of a certain quality, quantity, grade, composition, or model style
• Make a false claim that the service meets a certain standard, quantity, or grade
• Represents sponsorship, approval, performance, traits, accessories, uses, or benefits that the items or services do not have
• Makes a false or deceptive statement about the necessity for, or utility of, any products or services
• It gives any promise or assurance about the items’ performance, efficiency, or life span that isn’t based on appropriate or proper testing
• False offer of bargaining price: It is unfair commercial conduct if an advertisement is published in a newspaper or elsewhere offering products or services at a bargain price when there is no intention of providing them at that price for a reasonable period or in a valid quantity

Monopolistic Trade Practice (MTP) 

A monopolistic trade practice involves the abuse of market power in the production and marketing of goods and services by excluding potential competitors, charging unreasonably high prices, preventing or restricting competition, limiting technological development, deteriorating product quality, and so on.

Disadvantages of MRTP Act

• A commission with insufficient resources
• Due to a lack of clarity, burdensome processes, and limited resources, the government cannot deal with anti-competitive behaviour effectively
• There is no mention of any anti-competition practices that can be identified
• Cartels, predatory pricing, manipulation, and other anti-competitive behaviours are not expressly listed in the MRTP Act
• At the time of the MRTP Act’s development, the economic and trade environment in a place defined India solely by its different provisions Since then, however, there has been a significant push for liberalization, privatization, and globalization
• As a result, the legislation had to adapt to changing circumstances on economic and trade fronts

The Aims and Objectives of the MRTP Act

• To ensure that the economic system does not result in the concentration of economic power in the hands of a few wealthy individuals
• Ensure that monopolies are controlled and that monopolistic and restrictive commercial practices are prohibited

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Current Status of MRTP Act

This act is no longer in existence in India, having been repealed and replaced by the Competition Act of 2002, which took effect on September 1, 2009. As a result, the Competition Commission of India took over the MRTP commission.

Conclusion

When issues with the MRTP Act of 1969 surfaced, there was a need for a new, updated competition law policy. However, the debate emerged as to whether we needed to change the MRTP Act or if we needed to draft new law entirely. Many committees were formed for this reason. The Committee led by S.V.S Raghavan is the most significant of them all.