3. EXTANT COMPETITION LAW OF INDIA
MONOPOLIES AND
RESTRICTIVE
TRADE PRACTICES ACT,1969
BROUGHT INTO FORCE IN 1970
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4. The Monopolies And Restrictive Trade Practices Act,
1969 is an important piece of economic legislation designed
to ensure that the operation of the economic system does not
result in the concentration of economic power to the
common detriment.
The act came into force from 1st June, 1970, and has been
amended in 1991.
5. 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.
6. It means in order to maximize profit and to increase
market power, certain business firms unreasonably
charge high prices to prevent competition in the
production & distribution of goods by adopting unfair
trade practices.
It is a trade practice which represents the abuse of the
market power by charging unreasonably high prices.
7. Regulation of production and fixing the term of sale.
Prohibiting any action that restricts competition.
Fixing standards for goods produced.
8. A trade practice which restricts or reduces competition
may be termed as Restrictive Trade Practices and it
harm the consumer interest.
Because of their adverse effect on the consumer and
public interest, they are sought to be regulated in
almost every country of the world.
9. 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.
10. Unfair trade practice means a trade practice which, for
the purpose of promoting the sale, use or supply of any
goods or for the provision of any service, adopts any
unfair or deceptive practice.
11. 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.
12. The MRTP Act was severely criticized because of its
growth defeating provisions.
Therefore, the High Level Committee on Competition
Policy and Law has recommended that a new law
called the Indian Competition Act may be enacted and
the MRTP Act may be repealed.
13. Competition
Literary meaning: a contestable situation where
people fight for superiority.
In market economy, competition is a process
whereby firms fight against each other for
securing consumers for their products
14. An Act(enacted in December, 2002) to provide,
keeping in view of the economic development of the
country, for the establishment of a Commission:
to prevent practices having adverse effect on
competition,
to promote and sustain competition in markets, to
protect the interests of consumers
to ensure freedom of trade carried on by other
participants in markets, in India, and for matters
connected therewith or incidental thereto.
15. Competition policy => government measures directly
affecting both Firm Behavior and Industrial structure.
A competition policy should include both:
i) Economic policies adopted by Government, that
enhance competition in local and national markets, and
ii) Competition law designed to stop anti-competitive
business practices.
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17. Benefits to Consumers
A fair deal in the market place with:
The best possible choice of quality
The lowest possible prices, and
Adequate supplies of commodities.
18. Benefits to Efficient Producers
A safeguard against practices that could drive companies out of
business.
Lower entry barriers to promote entrepreneurship and growth of
SMEs.
Efficient allocation and utilization of resources ensures more
output and employment.
Control of international unfair competition and restrictive
business practices, such as international cartels
19. Components of competition policy
Competition Policy
Competition Law Government Policies
Private Actions
Deregulation Consumer
Industrial
and Policy
Policy
Privatization
Regulations Governing
Trade Policy
Capital and FDI
20. Competition law is the enactment of that policy and
achieves its objectives in three ways:
(1) prohibiting anti-competition agreements and
practices that harm free trade and competition;
(2) preventing abuse of dominant position and anti-
competitive practices that lead to such a dominant
position;
(3) regulating mergers and acquisitions.
21. Anti-Competitive Regulation of Mergers to
Abuse of a Prevent Tactics to Gain
Agreements Between
Firms
Dominant Excessive Dominance in a
( Collusion) Market Position Market
Applies to:
•Import cartels • Predatory pricing
•Price fixing •Total unification
•Market sharing • Price of the companies
•Bid rigging discrimination involved
•Limiting production
•Refusal to buy or • Excessive pricing •Buying of
supply sufficient shares in
•Tie-in arrangements a company so as to
•Exclusive-dealing • Abuse of have a say in
•Resale price intellectual property policy formulation
maintenance monopoly
•Territorial allocation
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23. According to Ruman, “Foreign direct
investment is the ownership and
control of foreign assets. In pratice,
FDI usually involves the ownership,
whole or partial of a company in a
foreign country. This is called foreign
subsidiary. This ongoing company.”
25. FDI brings Capital
New technology and methods
Increasing the skills of labour pool
Expand various networks export expansion
Foreign exchange earning
Increase the domestic economy
Significant growth
Competitive market structure
26. FDI interferes in the national politics
More focus on high profit areas rather than to the
priority sectors
Undermine national interests
Foreign investors sometimes engage in unfair and
unethical trade practices.
28. Synergy between Government Action and Competition
Assess all laws and government policies on the
touchstone of competition
All government policies should have an explicit
statement about the likely impact of the policy on
competition
Governments at the union and the state level should
frame and implement policies by acknowledging the
market process
Government should evolve a system of ‘competition
audit’ which could be applied to all existing and future
policies
