MONOPOLIES AND

RESTRICTIVE TRADE

PRACTICES ACT, 1969

INTRODUCTION
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.

OBJECTIVES
Before Amendment in1991:-

After Amendment in 1991:-

Regulation of monopolies and

Controlling monopolistic trade

prevention of concentration of

practices.

economic power.
Prohibit monopolistic, restrictive

Regulating restrictive and unfair

and unfair trade practices.

trade practices.

MONOPOLISTIC TRADE
PRACTICES
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.

REGULATION OF MTPS
Regulation of production and fixing the term of sale.

Prohibiting any action that restricts competition.

Fixing standards for goods produced.

RESTRICTIVE TRADE
PRACTICES
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.

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.

UNFAIR TRADE
PRACTICES
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.

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.

COMPETITION ACT (2002)

It was introduced in 2002 replacing the Mrtp act 1969.
It extends to whole of India except the state of Jammu and
Kashmir.
It is a tool to implement and enforce competition policy and to
prevent and punish anti competitive business practices by firms and
unnecessary government interference in the market.

OBJECTIVES OF
COMPETITION LAW
Promoting economic efficiency in both static and dynamic sense.
Protecting consumers from the undue exercise of market power.
Preserving and promoting the sound development of market
economy.
Facilitating economic liberalization,privatization and globalization.

DIFFERENCE BETWEEN
MRTP AND COMPETITION
ACT
MRTP ACT
Based on pre reform scenario.
Based on size as a factor.
Competition offences implicit
or not defined.
Complex in arrangement and
language.
Frowns upon dominance.
No penalties for offences.
Reactive and rigid.
Unfair trade practices
covered.

COMPETITION ACT
Based on post reform scenario.
Based on structure as a factor.
Competition offences explicit
and defined.
Simple in arrangement and
language.
Frowns upon abuse of
dominance.
Penalties for offences.
Proactive and flexible.
Unfair trade practices omitted.

CONCLUSION
The MRTP Act, besides adversely affecting economic growth,
blunted Indian companies ability to grow, consolidate and improve

competitiveness. This has had a very dampening effect on their global

competitiveness.