SEM V Competition Law – Unit I Class Notes
Constitutional Provisions Regulating Trade
- Article 19(1)(g):
- Right to Practice any Profession or to Carry on any Occupation, Trade, or Business: This fundamental right guarantees freedom of trade and commerce within India, subject to reasonable restrictions.
- Example: A business owner has the right to conduct their business anywhere in India, but this right may be restricted by laws that are reasonable and necessary in the interests of the public.
- Article 301:
- Freedom of Trade, Commerce, and Intercourse: Provides that trade, commerce, and intercourse throughout India shall be free. This is a key provision supporting the creation of a unified market in India.
- Example: Goods and services can move freely between states without restrictions, promoting an integrated national market.
- Article 302-305:
- Regulation of Trade, Commerce, and Intercourse: These articles allow the Parliament and State Legislatures to impose restrictions on the freedom of trade, commerce, and intercourse in the interest of the public.
- Example: States may impose taxes or restrictions on certain goods if they are justified in the public interest, such as to protect public health.
Salient Features of MRTP Act, 1986
- Objective:
- To Prevent Monopolistic and Restrictive Trade Practices: The MRTP Act aimed to prevent practices that adversely affect competition and to promote fair competition in the market.
- Monopolistic Trade Practices (MTP):
- Definition: Practices that lead to the dominance of a single entity in a market, which can be detrimental to fair competition.
- Example: A company that engages in predatory pricing to drive competitors out of the market.
- Restrictive Trade Practices (RTP):
- Definition: Practices that restrict competition or create monopolies, such as price-fixing or market-sharing agreements.
- Example: Agreements between firms to set prices at a certain level, thereby limiting competition.
- Unfair Trade Practices (UTP):
- Definition: Practices that are deceptive or misleading to consumers, affecting their purchasing decisions.
- Example: False advertising or misrepresentation of a product’s quality.
- MRTP Commission:
- Establishment: The Act established the MRTP Commission to investigate and adjudicate complaints related to monopolistic, restrictive, and unfair trade practices.
- Powers: The Commission had the power to issue orders to cease and desist from such practices and to impose penalties.
- Amendments and Repeal:
- 1991 Amendments: The MRTP Act was amended to align with economic reforms and the liberalization process.
- 2002 Repeal: The MRTP Act was eventually repealed and replaced by the Competition Act, 2002, which provided a more comprehensive framework for regulating competition.
Salient Features of Consumer Protection Act, 1986
- Objective:
- To Protect Consumer Interests: The Act aims to protect consumers from exploitation and to provide a legal framework for addressing grievances related to defective goods, deficient services, and unfair trade practices.
- Consumer Rights:
- Right to Safety: Protection against goods and services that are hazardous to life and property.
- Right to Information: Consumers must be provided with accurate information about products and services.
- Right to Choice: Access to a variety of goods and services at competitive prices.
- Right to be Heard: Consumers have the right to be heard and to seek redressal against unfair trade practices.
- Consumer Disputes Redressal Agencies:
- District Forum: For complaints involving amounts up to Rs. 20 lakhs.
- State Commission: For complaints involving amounts between Rs. 20 lakhs and Rs. 1 crore.
- National Commission: For complaints involving amounts over Rs. 1 crore.
- Consumer Protection Councils:
- National Consumer Protection Council: Advises the central government on consumer protection issues.
- State and District Consumer Protection Councils: Assist in the implementation of consumer protection measures at the state and district levels.
- Consumer Disputes Redressal Mechanism:
- Filing Complaints: Consumers can file complaints with the appropriate forum if they are dissatisfied with goods or services.
- Redressal: The forums can issue orders for compensation, replacement, or refund and can direct businesses to cease unfair practices.
- Amendments:
- Consumer Protection Act, 2019: The Act was amended to address emerging consumer issues and to strengthen the consumer redressal mechanism.
