MONOPOIES AND RESTRICYIVE TRADE PRACTICES (MRTP 1969)
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MONOPOLIES AND RESTRICTIVE TRADE PRACTICES ACT, 1969.
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BY PRACHI TANEJA
INTRODUCTIONPost independence, many new and big firms have entered the Indian market. They had little competition and they were trying to monopolize the market. The Government of India understood the intentions of such firms. In order to safeguard the rights of consumers, Government of India passed the MRTP bill. The bill was passed and the Monopolies and Restrictive Trade Practices Act, 1969, came into existence.
ABOUT THE MRTP ACT 1969
The MRTP Act extends to the whole of India except the state of Jammu and Kashmir. This law was enacted: To ensure that the operation of the economic system does not result in the concentration of economic power in hands of few. To provide for the control of monopolies and To prohibit monopolistic and restrictive trade practices.
To control monopolies & monopolistic trade practices an organization having a monopoly or a product or service by controlled. Prevention of concentration of economic power in few hands only. To regulate the concentration of economic to the common depriment. Prohibit monopolistic, restrictive and unfair trade practices.
(After Amendment in1991)
Controlling monopolistic trade practices. Regulating restrictive and unfair trade practices.
BASIC PROVISION OF MRTP ACT
MRTP ACT can be divided into two major parts:
The expansion, establishment of new undertakings, diversifications, mergers and amalgamations of such units are subject to approval by the central government. In exceptional cases, the government may ever force an industrial undertaking to divide into a number of smaller division.
Monopolistic Trade Practices Section (31 and 32)A trade practice which has or likely to have effects of: Restrictive Trade Practice: It is used by producers to restrict competition within given market. Unfair Trade Practice: The following may result in an unfair trade practice: False representation and misleading advertisement of goods and services.
Misleading representation regarding usefulness, need, quality, standard, style etc of goods and services. False claims or representation regarding price of goods and services. Giving false facts regarding sponsorship, affiliation etc. of goods and services. Giving false guarantee or warranty on goods and services without adequate tests.
REGULATION OF MTPs Regulation of production and fixing the term of sale. Prohibiting any action that restricts competition. Fixing standards for goods produced.
REGULATION OF RTPs The practice shall not be repeated. The agreement shall be void and shall stand modified in such a manner as may be specified in the order.
REGULATION OF UTPs The practice shall not be repeated. Any agreement relating to such an UTP shall be void or shall stand modified in such a manner as may be directed by the commission.
Exception to MRTP ACT
Owned or Controlled by government. Undertaking of the management taken over by the government. Corporate Society Any Public financial institute.
IMPACTS OF MRTP ACT
Competition resulted in speeding up industrialization Number of jobs increased Quality of products for example cars, two wheeler, etc improved Easy availability of quality products at affordable price New and Advanced technology came into the country Communications became easy and