MRTP Full form

MRTP ACT: MONOPOLY AND RESTRICTIVE TRADE PRACTICE UNDER MRTP ACT, 1969

The full form of MRTP act is monopoly and restrictive trade practice, which is enacted in the year 1969. That was enacted to ensure the operation of the economic system does not result in the concentration of economic power in the hands of few.

To provide for the control of monopolies, and to prohibit monopolistic and restrictive trade practices. the MRTP Act extends to the whole of India except Jammu and Kashmir.

TABLE OF CONTENTS

• AIMS AND OBJECTIVES OF MRTP ACT
• The act shall not apply to the following:-
• Unfair trade practice: Meaning
• What are unfair trade practices?
• Monopolistic trade practice (MTP) :--
• Drawbacks of MRTP act

AIMS AND OBJECTIVES OF MRTP ACT

On the basis of the recommendation of DUTT COMMITTEE.

MRTP Act was enacted in 1969 to ensure the concentration of economic power in hands of few rich. The act was there to prohibit monopolistic and restrictive trade practices. It extended to all of India except Jammu and Kashmir.

The aims and objectives of this act are

• To ensure that the operation of the economic system does not result in the concentration of economic power in hands of few rich.
• To provide for the control of monopolies, and
• To prohibit monopolistic and restrictive trade practices.

The act shall not apply to the following:-

• Any undertaking owned or controlled by the government company.
• Any undertaking owned or controlled by the government
• Any undertaking owned or controlled by a corporation  ( not being a company established by or under any central, provincial or state act.
• Any trade union or other association of workmen or employees formed for their own reasonable protection as such workmen or employees
• Any undertaking engaged in an industry, the management of which has been taken over by any person or body of persons under powers by the central government.
• Any undertaking owned by a co-operative society formed and registered under any central, provincial or state act.
• Any financial institution.

Unfair trade practice: Meaning

An unfair trade practice mEans a trade practice, which, for the purpose of promoting any sale, use or supply of any goods or services adopts an unfair method or unfair or deceptive practice.

What are unfair trade practices?

• Falsely suggests that the goods are of a particular standard quality, quantity, grade, composition, style of model
• Falsely suggest that the service is of a particular standard, quantity or grade.
• Represents that the goods or services have sponsorship, approval, performance, characteristics, accessories, uses or benefits that they do not have.
• Makes false or misleading representation concerning the need for, or the usefulness of, any goods or services.
• Gives any warranty or guarantee of the performance, efficiency or length of life of the goods, that is not based on an adequate or proper test.
• False offer of bargaining price:-Where an advertisement is published in a newspaper or otherwise, whereby goods or service is offered at a bargain price when in the fact there is no intention that the same may be offered at that price, for a reasonable period or reasonable quantity, it shall amount to an unfair trade practice.

RELATED CONTENT:  COMPETITION ACT, 2002

Monopolistic trade practice (MTP) :--

A monopolistic trade practice is that which represents an abuse of market power in production and marketing of goods and services by eliminating potential competitors, charging unreasonably high prices, preventing or reducing competition, limiting technical development, deteriorating product quality, etc

Drawbacks of MRTP act

• Poorly resourced commission. Inadequate in dealing effectively with anti-competitive practice, due to lack of definition, cumbersome procedures, and scarce resources.
• Absence of specification of identifiable anti-competition practices.
• Anti-competition practices like cartels, predatory pricing, rigging, etc. are not specifically mentioned in the MRTP Act.
• The time of the drafting of the MRTP Act, the economic and trade milieu prevalent at that time constituted India only for its various provisions. However, ever since, there has been a considerable movement towards liberalization, privatization, and globalization. Hence the law needed to yield to the changing scenario on both the economic and trade fronts.          

RELATED TOPIC: FULL-FORM OF FEMA