MRTP to Competition Act Summary

Hello Learners, today we will learn about the MRTP Act of 1969 and its provisions. And then we will learn how in 1992 when economic reforms started in India, the MRTP Act was obsolete and it was... The MTP Act was introduced in the year 2047 and replaced the MTP Act in 2002. The MTP Act was introduced in the year 2047 and replaced the MTP Act in 2002. The monopoly of big industries started in the market. They started their rights in the market. To stop this monopoly, the Indian government brought an act called MRTP Act. Let's see what was MRTP Act. MRTP Act was passed in the Parliament on 18th December 1969. It was recommended by the Dutt Committee that it should come into existence on 1st June 1970. it. This Act was applicable in India except Jammu and Kashmir. After that, in 1982, 1984, 1985 and 1991, in 1999, the Government of India made a committee under S. Raghavan. On the basis of this committee's report, In 2000, this committee submitted a report and in 2002, the committee's report was The competition act was replaced by the MRTP Act in 2002. This competition act is applicable in India except Jammu and Kashmir. Now let's see what were the objectives of the MRTP Act. The first objective of the MRTP Act was the prevention of concentration of economic power to the common detriment. to control the monopolistic, restrictive and unfair trade practices which are prejudicial to public interest. So, these activities, monopolistic, restrictive and unfair trade practices, which were against the public interest, were controlled. So these were the two major objectives of the MRTP Act. Next, we will see what is MRTP Commission. MRTP Act was a law and MRTP Commission was made to enforce it. The work of this commission was to inquire and make reports against industries that were coming against the complaint regarding monopoly or prohibited activities. And on the basis of this commission report, the central government would take action against these industries. So, we can say that MRT MRTP Act was a law and MRTP Commission was an enforcement agency. In MRTP Act, three types of prohibited activities were regulated. Let us know about these practices one by one. The first practice was the monopolistic trade practice. First of all, we will see what is monopolistic trade practice. When an organization goods production and sales misuse their powers. These practices are called monopolistic trade practices. The objective of such practices is to eliminate competition, take advantage of monopoly and charge unreasonably high prices. The monopolistic organization or companies their basic purpose is to This practice also deteriorates the product quality, limits technical development, prevents competition and adopts unfair trade practices. The quality of the product deteriorates the companies. The quality of the product deteriorates them. Because they know that there is no one in their competition. And whatever quality product they sell, people will buy it. In technical development, R&D They don't invest much in research and development because they know that the product they bring in the market is monopolized by people. So, these types of activities and practices are called monopolistic trade practices. Next practice is Unfair trade practice. So monopolistic trade practice is different from unfair trade practice. So unfair trade practice is the false representation and misleading advertisement of goods and services. When organization companies spread false information about their goods and services, give false representation about them or mislead their advertisement, that comes under unfair trade practices. unfair trade practices falsely representing Second-hand goods as new and misleading representations regarding usefulness, need, quality, standard, style, etc. of goods and services. About their goods and services, usefulness, need, quality, standard, when companies give wrong advertisements, misguide people, such practices are called unfair trade practices. Next is restrictive trade practices. A trade practice which restricts or reduces competition in the market may be termed as a restrictive trade practice. So, these types of practices which restrict competition or reduce competition are called restrictive trade practices. So, these three practices are prohibited and the Indian government brought the MRTP Act to stop these three practices. After this comes Competition Act 2002. When the liberalisation and economic reforms started in 1992, the MRTP Act was creating hindrance in economic reforms. So it was necessary to replace this Act. For this, Competition Act 2002 came into existence. Competition Act jo hai uske... So, let's read the objectives of the 2002 Competition Act. The first objective of the Competition Act was to promote healthy competition in the market. The main focus of the MRTP Act was on monopoly, whereas the focus of the Competition Act was on competition. How to promote healthy competition in the Indian market. then second was Second is to prevent those practices which are having adverse effect on competition. And to prevent those practices which have adverse effect on competition. Such practices which prevent competition, to prevent those practices, those activities. Then third objective of Competition Act is to protect interest of concerns in a suitable manner. To protect the interest of traders and consumers. Then fourth is to ensure freedom of trade in Indian market. Indian market may Free trade. Fifth objective is to prevent abuse of dominant position in the market actively. If an industry is misusing its dominant position, stop it. Sixth objective is regulating the operation and activities of combination. Whatever combinations are made, whatever mergers and acquisitions are made between companies, regulate and control their activities. There is no such combination which is putting hindrance in competition and putting recovery in competition. Then seventh objective is to creating awareness and imparting training about the Competition Act. And the last objective of Competition Act is to create awareness, training and to tell what is Competition Act. So these are the objectives of Competition Act 2002. So the Competition Act 2002 is designed for these purposes. What is the overall scheme of the Competition Act? The Competition Act basically covers three aspects. First is the prohibition of anti-competitive agreement. Second is prohibition of abuse of dominant position. And third is regulation of combination. So, now let's look at these three aspects of the Competition Act one by one. So, first one is prohibition of anti-competitive agreement, section 3. According to section 3, subsection 1 of the Act, No enterprise or association of enterprises or persons or association of persons shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provisions of services which cause or is likely to cause an applicable adverse effect on competition within India. It means that any enterprise, any association This type of practice cannot be involved or this type of agreement cannot be made which is anti-competitive. The contracts that are made in the market are restricted by the organizations, enterprises, or associations of persons. The contracts that are made in the market are restricted by the organizations, enterprises, or associations of persons. The contracts that are made in the market are restricted by the organizations, enterprises, or associations of persons. that are prohibited under Competition Act 2002. So as per Section 3, Subsection 2, any agreement entered in contravention of the provision contained in Subsection 1 shall be void. If there is such an agreement in enterprises which stops competition or restricts it, then that agreement will be called void. Second is Prohibition of Abuse of Dominant Position, Section 4. Section 1 of the Act states, no enterprise shall abuse its dominant position. It means that no organization can misuse its dominant position, i.e. its power. It may be noted that dominant position is not itself prohibited. What is prohibited is its misuse. So, the dominant position of any organization or company is not prohibited. It is not limited to the market. If the reputation of an organization or company is strong in the market, So, that is not a bad thing. The wrong thing is that if he misuses his dominant position, for example, he stops other small enterprises, he destroys their existence, he misuses his power, then that thing is prohibited. Right? So, dominant position is not prohibited. What is prohibited is, if he misuses his dominant position, then he will be given a So that is against the Act. So next is the regulation of combinations. So this comes under section 5. So section 5 of the Act relates to regulation of combinations. So according to section 5, subsection 1, no person or enterprises shall enter into a combination which cause or is likely to cause an appreciable adverse effect on competition within the relevant market in India and such a combination shall be void. This means that when two organizations agree, for example, if two companies have mergers and acquisitions, and these mergers and acquisitions are happening to end the competition in the market, then that thing is prohibited under this Act. So the combination in itself is not prohibited. It will be held void only if adversely affect the competition. So if any other combination is made, any organization comes into the combination, agreements with each other, if their purpose is to end competition in the market, then their combination will be considered as void. So it will be considered as void. They will be taken against. action here Jai so these are the three aspects of the Competition Act 2002. To make the Competition Act applicable, the Competition Commission came into existence and it was established on 14 October 2003. To make this applicable, the Competition Commission came into existence in 2003. Next we will see the difference between MRTP Act and Competition Act. difference hai MRTP Act or Competition Act mein that is meaning MRTP Act is the first competition law made in India which covers rules and regulations relating to unfair trade practices whereas Competition Act is implemented to promote and keep up competition in economy and ensure freedom of business. So, where competition, the MRTP Act came into existence, unfair trade was to stop the trade practices, the competition act came into existence to promote competition in the market. Then nature. The nature of MRTP act was reformatory and the nature of competition act was punitive. So, what is reformatory? Reformatory was that if an industry or company is found guilty under the MRTP Act, It was a provision of cease and desist, meaning that the company has to stop that practice and change it. If the company is adopting an unfair trade practice, then they have to stop that practice. But in the Competition Act, it was not like that. In the Competition Act, if a company or an organization is found guilty, then there was punishment against it. Third is dominance. So, in the MRTP Act, the company's dominance was based on the size of its firm. The company's dominance in the Competition Act is found on the basis of its sales. The focus of the MRTP Act was to protect the consumer's interest. But in the Competition Act, the public at large is focused. Then offense against principle of natural justice. There were 14 offenses in the MRTP Act. Whereas in the Competition Act, there are four offences. In the MRTP Act, there was no penalty for these offences. They just had to stop or change their practices. But in the Competition Act, they have a penalty provision for these offences. The objective of the MRTP Act was to control monopolies. Whereas the focus of the Competition Act was to promote competition. So, after 1992, When the economic reforms started, our focus shifted from monopoly to competition. Then appointment of chairman, chairman of MRTP commission was appointed by central government. Whereas in competition act, the chairman of competition committee is made by retired judges or other specialised in their field. So these are the differences among the MRTP Act and the Competition Act. So this is all about the MRTP Act and how MRTP Act abolished, obsolete and it was replaced by Competition Act 2002. So learners, next kuch practice questions hai aap ke liye. To aap in questions ko ghar mein zhruv solve kijega. So learners, aaj ka session yahi tak.

They started their rights in the market. To stop this monopoly, the Indian government brought an act called MRTP Act. Let's see what was MRTP Act. MRTP Act was passed in the Parliament on 18th December 1969. It was recommended by the Dutt Committee that it should come into existence on 1st June 1970. it.

This Act was applicable in India except Jammu and Kashmir. After that, in 1982, 1984, 1985 and 1991, in 1999, the Government of India made a committee under S. Raghavan.

On the basis of this committee's report, In 2000, this committee submitted a report and in 2002, the committee's report was The competition act was replaced by the MRTP Act in 2002. This competition act is applicable in India except Jammu and Kashmir. Now let's see what were the objectives of the MRTP Act. The first objective of the MRTP Act was the prevention of concentration of economic power to the common detriment. to control the monopolistic, restrictive and unfair trade practices which are prejudicial to public interest.

So, these activities, monopolistic, restrictive and unfair trade practices, which were against the public interest, were controlled. So these were the two major objectives of the MRTP Act. Next, we will see what is MRTP Commission. MRTP Act was a law and MRTP Commission was made to enforce it.

The work of this commission was to inquire and make reports against industries that were coming against the complaint regarding monopoly or prohibited activities. And on the basis of this commission report, the central government would take action against these industries. So, we can say that MRT MRTP Act was a law and MRTP Commission was an enforcement agency. In MRTP Act, three types of prohibited activities were regulated. Let us know about these practices one by one.

The first practice was the monopolistic trade practice. First of all, we will see what is monopolistic trade practice. When an organization goods production and sales misuse their powers.

These practices are called monopolistic trade practices. The objective of such practices is to eliminate competition, take advantage of monopoly and charge unreasonably high prices. The monopolistic organization or companies their basic purpose is to This practice also deteriorates the product quality, limits technical development, prevents competition and adopts unfair trade practices. The quality of the product deteriorates the companies. The quality of the product deteriorates them.

Because they know that there is no one in their competition. And whatever quality product they sell, people will buy it. In technical development, R&D They don't invest much in research and development because they know that the product they bring in the market is monopolized by people. So, these types of activities and practices are called monopolistic trade practices.

Next practice is Unfair trade practice. So monopolistic trade practice is different from unfair trade practice. So unfair trade practice is the false representation and misleading advertisement of goods and services.

When organization companies spread false information about their goods and services, give false representation about them or mislead their advertisement, that comes under unfair trade practices. unfair trade practices falsely representing Second-hand goods as new and misleading representations regarding usefulness, need, quality, standard, style, etc. of goods and services. About their goods and services, usefulness, need, quality, standard, when companies give wrong advertisements, misguide people, such practices are called unfair trade practices. Next is restrictive trade practices. A trade practice which restricts or reduces competition in the market may be termed as a restrictive trade practice.

So, these types of practices which restrict competition or reduce competition are called restrictive trade practices. So, these three practices are prohibited and the Indian government brought the MRTP Act to stop these three practices. After this comes Competition Act 2002. When the liberalisation and economic reforms started in 1992, the MRTP Act was creating hindrance in economic reforms. So it was necessary to replace this Act.

For this, Competition Act 2002 came into existence. Competition Act jo hai uske... So, let's read the objectives of the 2002 Competition Act. The first objective of the Competition Act was to promote healthy competition in the market.

The main focus of the MRTP Act was on monopoly, whereas the focus of the Competition Act was on competition. How to promote healthy competition in the Indian market. then second was Second is to prevent those practices which are having adverse effect on competition.

And to prevent those practices which have adverse effect on competition. Such practices which prevent competition, to prevent those practices, those activities. Then third objective of Competition Act is to protect interest of concerns in a suitable manner.

To protect the interest of traders and consumers. Then fourth is to ensure freedom of trade in Indian market. Indian market may Free trade.

Fifth objective is to prevent abuse of dominant position in the market actively. If an industry is misusing its dominant position, stop it. Sixth objective is regulating the operation and activities of combination.

Whatever combinations are made, whatever mergers and acquisitions are made between companies, regulate and control their activities. There is no such combination which is putting hindrance in competition and putting recovery in competition. Then seventh objective is to creating awareness and imparting training about the Competition Act. And the last objective of Competition Act is to create awareness, training and to tell what is Competition Act. So these are the objectives of Competition Act 2002. So the Competition Act 2002 is designed for these purposes.

What is the overall scheme of the Competition Act? The Competition Act basically covers three aspects. First is the prohibition of anti-competitive agreement.

Second is prohibition of abuse of dominant position. And third is regulation of combination. So, now let's look at these three aspects of the Competition Act one by one.

So, first one is prohibition of anti-competitive agreement, section 3. According to section 3, subsection 1 of the Act, No enterprise or association of enterprises or persons or association of persons shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provisions of services which cause or is likely to cause an applicable adverse effect on competition within India. It means that any enterprise, any association This type of practice cannot be involved or this type of agreement cannot be made which is anti-competitive. The contracts that are made in the market are restricted by the organizations, enterprises, or associations of persons. The contracts that are made in the market are restricted by the organizations, enterprises, or associations of persons.

The contracts that are made in the market are restricted by the organizations, enterprises, or associations of persons. that are prohibited under Competition Act 2002. So as per Section 3, Subsection 2, any agreement entered in contravention of the provision contained in Subsection 1 shall be void. If there is such an agreement in enterprises which stops competition or restricts it, then that agreement will be called void.

Second is Prohibition of Abuse of Dominant Position, Section 4. Section 1 of the Act states, no enterprise shall abuse its dominant position. It means that no organization can misuse its dominant position, i.e. its power. It may be noted that dominant position is not itself prohibited.

What is prohibited is its misuse. So, the dominant position of any organization or company is not prohibited. It is not limited to the market. If the reputation of an organization or company is strong in the market, So, that is not a bad thing. The wrong thing is that if he misuses his dominant position, for example, he stops other small enterprises, he destroys their existence, he misuses his power, then that thing is prohibited.

Right? So, dominant position is not prohibited. What is prohibited is, if he misuses his dominant position, then he will be given a So that is against the Act. So next is the regulation of combinations. So this comes under section 5. So section 5 of the Act relates to regulation of combinations.

So according to section 5, subsection 1, no person or enterprises shall enter into a combination which cause or is likely to cause an appreciable adverse effect on competition within the relevant market in India and such a combination shall be void. This means that when two organizations agree, for example, if two companies have mergers and acquisitions, and these mergers and acquisitions are happening to end the competition in the market, then that thing is prohibited under this Act. So the combination in itself is not prohibited.

It will be held void only if adversely affect the competition. So if any other combination is made, any organization comes into the combination, agreements with each other, if their purpose is to end competition in the market, then their combination will be considered as void. So it will be considered as void.

They will be taken against. action here Jai so these are the three aspects of the Competition Act 2002. To make the Competition Act applicable, the Competition Commission came into existence and it was established on 14 October 2003. To make this applicable, the Competition Commission came into existence in 2003. Next we will see the difference between MRTP Act and Competition Act. difference hai MRTP Act or Competition Act mein that is meaning MRTP Act is the first competition law made in India which covers rules and regulations relating to unfair trade practices whereas Competition Act is implemented to promote and keep up competition in economy and ensure freedom of business.

So, where competition, the MRTP Act came into existence, unfair trade was to stop the trade practices, the competition act came into existence to promote competition in the market. Then nature. The nature of MRTP act was reformatory and the nature of competition act was punitive. So, what is reformatory? Reformatory was that if an industry or company is found guilty under the MRTP Act, It was a provision of cease and desist, meaning that the company has to stop that practice and change it.

If the company is adopting an unfair trade practice, then they have to stop that practice. But in the Competition Act, it was not like that. In the Competition Act, if a company or an organization is found guilty, then there was punishment against it.

Third is dominance. So, in the MRTP Act, the company's dominance was based on the size of its firm. The company's dominance in the Competition Act is found on the basis of its sales. The focus of the MRTP Act was to protect the consumer's interest.

But in the Competition Act, the public at large is focused. Then offense against principle of natural justice. There were 14 offenses in the MRTP Act.

Whereas in the Competition Act, there are four offences. In the MRTP Act, there was no penalty for these offences. They just had to stop or change their practices.

But in the Competition Act, they have a penalty provision for these offences. The objective of the MRTP Act was to control monopolies. Whereas the focus of the Competition Act was to promote competition. So, after 1992, When the economic reforms started, our focus shifted from monopoly to competition. Then appointment of chairman, chairman of MRTP commission was appointed by central government.

Whereas in competition act, the chairman of competition committee is made by retired judges or other specialised in their field. So these are the differences among the MRTP Act and the Competition Act. So this is all about the MRTP Act and how MRTP Act abolished, obsolete and it was replaced by Competition Act 2002. So learners, next kuch practice questions hai aap ke liye. To aap in questions ko ghar mein zhruv solve kijega.

So learners, aaj ka session yahi tak.

Transcript for:MRTP to Competition Act Summary

Transcript for:
MRTP to Competition Act Summary