Objectives of mrtp act. AN OVERVIEW OF MRTP ACT , 1969 2022-10-22
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The Monopolies and Restrictive Trade Practices (MRTP) Act was enacted in India in 1969 with the main objective of promoting competition and protecting consumers from exploitation by monopolistic and restrictive trade practices. The act aims to ensure that the interests of consumers are protected and that there is fair competition in the market.
One of the main objectives of the MRTP Act is to prevent the concentration of economic power in the hands of a few enterprises, which can lead to the abuse of dominant position and the exploitation of consumers. The act seeks to regulate and control monopolistic and restrictive trade practices, such as price fixing, discriminatory pricing, and the sale of goods below cost, to ensure that consumers are not exploited.
Another objective of the MRTP Act is to promote and encourage fair competition in the market. The act seeks to create a level playing field for all enterprises, regardless of their size or market power. It aims to prevent dominant firms from engaging in anticompetitive practices that could exclude competitors from the market and stifle innovation.
The MRTP Act also aims to protect consumers from unfair trade practices and to ensure that they have access to a wide range of goods and services at competitive prices. It seeks to ensure that consumers are well-informed about the quality, price, and availability of goods and services, and that they have the right to choose the products and services that best meet their needs.
In summary, the main objectives of the MRTP Act are to promote competition, protect consumers from exploitation, and ensure fair trade practices in the market. The act plays a crucial role in regulating and controlling monopolistic and restrictive trade practices, promoting fair competition, and protecting the interests of consumers in India.
Competition Act 2002: Objective, Features
The same applies for the newly enacted Competition law whose jurisprudence is currently at its very nascent stage. For this purpose, many committees were set up. The government was primarily responsible for the pattern of industrial development. As such, these sections should have been altogether abolished, as transfer of shares within the group does not lead to any further concentration of economic power of that group, as no increase on the holding of the group is involved and hence there should be no need for permission from the Government. Any anti-monopoly legislation in India should take note of this reality. However, the Act will not apply to undertakings, which are owned or controlled by a Government company or the Government, and are engaged in the production of arms and ammunition and allied items of defence equipment, defence aircraft and warships, atomic energy, minerals specified in the schedule to the Atomic Energy Control of production and use Order 1953, and industrial units under the currency and coinage division, Ministry of Finance, Department of Economic Affairs. During the initial 5 year plans, the primary focus was on achieving the Industrial and Economic development.
This proved to be major leniency for businesses that led to delayed registrations or even no improvement in the structure of the business. The Commission has the authority under section 18 of the Act to govern i the process and conduct of its business; ii the procedure of benches of Commission. After this on December 27, 1969, this bill received the assent of the President after having been passed by both the houses of parliament and came into force on June 1, 1970. It does not specify any provision relating to registration of agreement. Under this legislation, the Competition Commission of India was established to prevent the activities that have an adverse effect on competition in India.
Monopolistic And Restrictive Trade Practices Act,1969: An Overview
The outlining restrictions on acquisition or transfer of share, have been reverted back to the Companies Act, 1956, as Sections 108-A to 108-1. It was mandatory for the enterprises to take approvals from the government before carrying out any kind of corporate restructuring or takeover. This meant that activities which hamper or eliminate competition of healthy nature in the economic market were prohibited as these trade practices were anti-consumer. Some businesses often tend to control the supply of goods or products in the market by either restricting production or taking control of the delivery. It was felt that the recommendations were effective in maintaining a balance between economic development and equity. Section 36A of the Act was introduced in the amendment to protect final customers from deceptive market practices and was also introduced so that meaningful steps can be taken against them. The License Raj which restricted the growth of the Indian economy was thus abolished.
Monopolies and Restrictive Trade Practices Act 1970
The concept of Rule of Reason was not applied. However, by 1984, amendments were needed to update the act as per the needs of the economy. Critical Analysis of Competition Law in India,Â Latestlaws. In its report, the committee found that Big Businessmen have succeeded in thwarting the Industrial Policy regulations to meet their own selfish interests. Soon it led to concentration of economic power in the hands of few. Mohammad Asad Mahmood, Critical Analysis of Competition Law in India, Latestlaws.
Objectives of Competition Act, difference with MRTP
In order to control these trade practices, the prime instrument is the registration of agreements relating to restrictive trade practices. Most of the cases that this authority has decided till now involve niche markets that are mostly controlled by the richest 10% of the country. In the Indian markets, this Legislation effectively regulated rivalry until 1984. It also provides for deferent punishment for contravention of the orders passed by the Commission. However, the transfer of provisions Sections 30A to 30G as sections 108A to 108 of the Companies Act, is a retrograde step.
The main criterion for regulating monopolies should be the ultimate interest of the consumer. Jail terms, though provided for, were rarely imposed. A criterion was fixed to identify the dominant undertaking. The decision to remove the pre-entry restrictions on establishment of new undertakings, amalgamation and merger are welcome as these would help companies in achieving economies of scale and enable them to reduce cost of production and become more competitive in the international markets. The Act provides for control of monopolies, probation of monopolistic, restrictive and unfair trade practice and protection of consumer interests. The Competition Act, 2002 was enacted by the Parliament of India and governs Indian competition law.
Claims against fake and misleading advertisements, wrong representation of goods, false guarantees came under this Act. Although it was not meant for all segments of the financial system and did not refer to the government sector, public sector undertakings and commitments of the central and state governments. It could not stand the tests of time which required an overhauling of the competition law policies in India in consonance with the new issues arising due to the entry of the large scale foreign firms in India. The presence of such complex procedures, many firms found it difficult to survive, thereby affecting the final consumers. This acted as a means to keep the company out of the purview of the Act.
To provide for the control of monopolies, 3. The Act attempts to amend monopolies in line with the requirements of economic growth and social justice — the twin goals of our planning process. Aishwarya Says: I have always been against If you are interested in participating in the same, do let me know. The Government, however, retains the power to direct division of an undertaking and severance of inter-connection between undertakings if it is of the opinion that the working of an undertaking, is prejudicial to the public interest, or has led or is leading to emergence of any monopolistic or restrictive trade practice. For them, obtaining licenses and permissions became a cakewalk. Only if the company can show that certain good results will follow from restrictive trade practices, which outweigh the harm from the practice, will the restrictive trade practice be allowed. Answer: A monopoly occurs when a single firm and its product control an entire industry, with little to no competition and customers forced to buy that exact product or service from that one company.
New Delhi, Government of India, Planning Commission. After these amendments Licence, Raj which obstructed government trade growth was abolished. However, with the wave of globalization that came post the 1991 reforms the scenario in the country changed. This thus increased the cost of transportation for non-members. Such traders also bring in conditions of delivery to affect the flow of supplies leading to unjustified costs. On a plain reading of the provision, we can infer that the Commission did not have the power to impose harsh penalties or fines on the defaulters. The criterion for identifying the dominant undertakings was also fixed.
A weak enforcement of law would be no different than not having the law itself. The License Raj which restricted the growth of the Indian economy was thus abolished. The thrust was to promote the public sector of the county which only could lead to the growth of the economy. This case however brought into light the fact that the Commission did not have powers to impose penalty or high monetary fines. The Amending Act, which seeks to amend the Monopolies and Restrictive Trade Practices Act, 1969, and the Companies Act, 1956, was brought before the house in pursuance of the recommendations made by the Sachar Committee, to plug certain loopholes in the Act which had been pointed out by the court.