Monopolistic and Restrictive Trade Practices (MRTP) Act

The full form of MRTP is Monopolistic and Restrictive Trade Practices, which is a very important yet extremely controversial piece of economic legislation. To prevent the functioning of the economic system from leading to the concentration of economic power in the hands of a select few as per requirements, the MRTP Act was passed.

This page provides a summary of the MRTP Act, outlining its main features, important provisions, and changes that have been made throughout the years. Ultimately, it was repealed and replaced with India’s first market-regulating law, which is known as the Competition Act of 2002.

Also, the Competition Act, which was implemented on September 1st, 2009, by the Competition Commission of India, has superseded the MRTP Act and is no longer in force in our country.

Explore this article to learn about the Monopolistic and Restrictive Trade Practices – MRTP Act in depth.

Monopolistic and Restrictive Trade Practices (MRTP) Act

• Enactment: The Monopolistic and Restrictive Trade Practices (MRTP) Act was enacted in 1969 in India.
• Objective: The primary objective of the MRTP Act was to prevent monopolistic and restrictive trade practices that could be detrimental to fair competition and consumer interests.
• Scope: The act applied to businesses and trade practices that were deemed to have a monopolistic or restrictive impact on the market.
• Monopolistic Practices: It aimed to curb monopolistic practices, ensuring that no single entity had undue control over a particular industry or market.
• Restrictive Trade Practices: The act addressed restrictive trade practices, which included agreements or arrangements that restricted competition or manipulated prices.
• Consumer Protection: One of its goals was to protect consumers from unfair trade practices and to promote healthy competition for the benefit of the public.
• Amendments: The MRTP Act underwent several amendments during its existence to adapt to changing economic scenarios.
• Replacement: The MRTP Act was eventually replaced by the Competition Act in 2002, which introduced a more modern framework for competition regulation in India.
• Competition Act: The Competition Act aimed to create a more dynamic and competitive economic environment, aligning with global standards of competition law.

The Monopolistic and Restrictive Trade Practices Legislation (MRTP) was designed and implemented in 1969 to ensure that the economic system’s operation does not result in the concentration of economic power in any situation in the hands of a few.

As a result, make sure that monopolies are managed and that restrictive and monopolistic commercial practices are outlawed to meet the requirement. All of India is covered by the Monopolistic and Restrictive Trade Practices, MRTP Act, with the exception of Jammu and Kashmir for some internal reasons.

So, trade practices that lead to a firm or an oligopolistic firm made up of three enterprises gaining a dominant position depending on requirements in the market are referred to as monopolistic trade practices. The first significant piece of legislation aimed at controlling unrestricted free trade was the MRTP Act as well.

Aims and Objectives of the MRTP Act

• First, to make sure that the structure of the economy prevents a small number of rich people from holding all the economic power and achievements.
• to make certain that the monopolies are restrained and that restrictive and monopolistic business practices are not tolerated at any time.
• also to outlaw the use of monopolistic and constrictive business tactics, depending on nature.

Trade practices regulated by the MRTP Act

• Restrictive Trade Practices: Basically, traders frequently engaged in practices that obstructed the flow of money into production in an effort to strengthen their position in the market and increase their earnings to grow more. These dealers also had an impact on supply by imposing delivery requirements and timing, which led to the emergence of many unnecessary expenses.
• Monopolistic Trade Practices: When it comes to the production and selling of goods and services as per requirements, this refers to abusing one’s position in the market depending on growth and value.
• Unfair Trade Practices: An inaccurate portrayal of new and used products and misleading representation of the quality of goods, their style, usefulness, need, and standard for recovery Also, sometimes it happens to make false claims or representations about the price of goods and services as per time.

MRT Commission

• Basically, a commission of two members at minimum and eight members at most is involved in the process.
• The chairman of this committee needed to be eligible to serve as a judge on a state’s high court or supreme court as per need.
• Also, the active members of the commission may hold office for no more than five years.
• The members of this commission demonstrated their ability to handle, depending on the overall situation, matters pertaining to public affairs, economics, commerce, industry, law, and accounting, or they possessed sufficient knowledge and expertise in these areas to control.
• The DG, or Director General of Investigation and Registration, also supported the commission in conducting the required investigation, keeping an agreement record, and handling the carriage of procedures during the commission’s inquiry to process the activities perfectly.

The Current Status of the Monopolistic and Restrictive Trade Practices- MRTP Act

Basically, after being repealed and replaced by the Competition Statute of 2002, which went into force on September 1, 2009, this statute is no longer in effect in India or our country. Consequently, the MRTP commission was taken over by the Competition Commission of India to control the actual process.

Conclusion on Monopolistic and Restrictive Trade Practices (MRTP) Act

A fresh and updated competition law policy was required after problems with the MRTP Act of 1969 were discovered. But there was disagreement about whether the Monopolistic and Restrictive Trade Practices – MRTP Act needed to be changed or if a whole new law needed to be drafted at any time. This prompted the formation of numerous committees as well. So, of all the committees, the one headed by S.V.S. Raghavan is the most important. Through this article, we can understand its features and objectives in a detailed manner.

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FAQs on Monopolistic and Restrictive Trade Practices – MRTP Act

Mention what the MRTP stands for

Monopoly and restrictive trade practices are what the MRTP stands for. The legislation was put into effect in 1969 with the intention of outlawing monopolistic and restrictive commercial practices for various reasons.

What is the MRTP Act of 1966 and its salient features?

Basically, the Act mandated that all local authorities can create a development plan as per requirements for the territory under their control, which permitted the reservation of sites necessary for public usage and the distribution of land for other uses as well.

What is the new name of the MRTP Act?

In order to foster competition and safeguard the interests of consumers, the Monopolies and Restrictive Trade Practices (MRTP) Act is an Indian law that attempts to prohibit monopolies and restrictive trade practices in all aspects. It was passed into law in 1969, and the Competition Act took its place in 2002 on demand.

Who is the chairman of the MRTP Commission?

The Monopolies and Restrictive Trade Practices Commission, with its headquarters located in New Delhi, has a new chairman, Shri Justice Charder Mohan Nayar, a serving judge of the Delhi High Court, chosen by the government to control all the processes. Shri Justice C.M. Nayar was sworn in by Shri Justice B.N. to an oath of office and secrecy for requirement.

Where is the headquarters of the MRTP Commission?

The Board comprises four regional benches in Delhi, Mumbai, Kolkata, and Chennai in addition to its principal bench in New Delhi and an extra principal bench for the southern states in Chennai for the beneficial process. The quasi-judicial Restrictive Trade Practices Commission (MRTP Commission) is an entity of all types.

What is the full form of MRTP?

The full form of MRTP is “Monopolistic and Restrictive Trade Practices.”