The Directive Principles of our constitution suggest that ownership and control of material resources should be widely distributed and there should be no concentration of wealth and means of production. With this in mind, the competition law of India, namely the Monopolistic and Restrictive Trade Practice Act, 1969, was enacted.
In many countries and in particular developing countries like India, a large number of consumers are illiterate and ill-informed and possess limited purchasing power in an environment, where there is shortage of goods. Very often, one witnesses the spectacle of a large number of non-essential, sub-standard, adulterated, unsafe and less useful products being pushed through by unscrupulous traders by means of Unfair Trade Practices and deceptive methods. Subtle deception, half truths and misleading omissions inundate the advertisement media and instead of the consumer being provided with correct, meaningful and useful information on the products, they often get exposed to fictitious information which tends to their making wrong buying decisions. Transparent information is missing and needs to be a goal to be chased.
The regulatory provisions in the MRTP Act apply to almost every area of business – production, distribution, pricing, investment, purchasing, packaging, advertising, sales promotion, mergers, amalgamations and takeover of undertakings (provisions relating to mergers, amalgamations and take-over’s were deleted in the MRTP Act by the 1991 amendments to it). They seek to provide protection and support to consuming public by reducing if not eliminating from the market Monopolistic, Restrictive and Unfair Trade Practices. One of the main goals of the MRTP Act is to encourage fair play and fair deal in the market besides promoting healthy competition.
The principal objectives sought to be achieved through the MRTP Act are:
· prevention of concentration of economic power to the common detriment;
· control of monopolies;
· prohibition of Monopolistic Trade Practices (MTP);
· prohibition of Restrictive Trade Practices (RTP);
· prohibition of Unfair Trade Practices (UTP).