1. MRTP Act
The Monopolies and Restrictive Trade Practices Act,
1969, brought into force from 1st June 1970, was a
very common controversial piece of legislation.
The principal objectives of the MRTP Act, which
extends to the whole of India except to the State
of Jammu and Kashmir, were:
1. Prevention of concentration of economic power to
the common detriment, and
2. Control of monopolistic, restrictive and unfair trade
practices which are prejudicial to public interest.

2. The MRTP Act sought to prevent the concentration of
economic power to the common detriment by
preventing those developments which might result
in the concentration of economic power such as
substantial expansion of existing undertaking;
mergers and amalgamations; takeovers; and
interconnection of undertakings.
The MRTP companies (i.e. dominant undertaking with
market share of 25% or more and assets of Rs
one crore or more and other undertakings having
assets, including that of interconnected
undertakings, of Rs. 100 crores or more) had to
obtain prior approval of the central government for
any of the developments.

3. The MRTP Act was significantly amended in 1982,
1984, 1985 and 1991.
The amendment of 1985 was to raise the asset
threshold of undertaking (s) from Rs. 20 Crores to
Rs. 100 Crores for applying the provisions of the
MRTP Act relating to prevention of concentration
of economic power.

4. 1991 Changes
The Industrial Policy Statement of July 24, 1991,
announced very drastic changes in the MRTP Act,
viz:
 Repeal of the provisions of Act pertaining to
concentrating of economic power i.e. investment
limits, except the provisions empowering the
government to defuse concentration of economic
power to the common detriment.
 The provisions of the MRTP Act pertaining to the
concentration of economic power were much
criticized because of their negative impact on
growth and competition.

5.  The interference of the government through the
MRTP Act in investment decisions of large
companies became deleterious in its effects on
Indian industrial growth. The thrust of the MRTP
Act in future will be on the control of restrictive and
unfair trade practices.
 The Government, however retains the power to
defuse or breakup concentration of economic
power to the common detriment. If the central
government is of the opinion that the working of
an undertaking is prejudicial to the public interest,
or has led or is leading, or is likely to lead, to the
adoption of any monopolistic or restrictive trade
practice, the government is empowered by the
MRTP act to direct:

6. 1. The division of any trade of the undertaking by
the sale of any part of the undertaking or assets
thereof: or
2. The division of any undertaking or
interconnected undertakings into such number
of undertakings as the circumstances of the
case may justify.

7. Control of Monopolistic Trade Practice
A monopolistic trade practice is a trade practice
which has, or is likely to have, the effect of
reasonably preventing or lessening competition in
the production, supply or distribution of any goods
or services; limiting technical development and
capital investment to the common detriment; or
allowing the quality of goods or services to
deteriorate.

8. A monopolistic trade practice shall be deemed to be
prejudicial to the public interest, if having regard to
the economic conditions prevailing in the country,
and to all other matters which are relevant in the
particular circumstances, the effect of the trade
practice is or would be:
1. To increase unreasonably the cost relating to the
production, supply or distribution of goods or the
performance of any service;
2. To increase unreasonably:
a) The price at which goods are sold, or
b) The profits derived from the production, supply pr
distribution of any goods (including their sale or
purchase) or from the performance of any service:

9. 3. To reduce or limit unreasonably competition in the
production, supply or distribution of any goods
(including their sale or purchase) or the provision
of any service
4. To limit or prevent unreasonably the supply of
goods to consumers or the provision of any
service
5. To result in a deterioration in the quality of any
goods or in the performance of any service.

10. 1. Section 31 provides that where it appears to the
Central Government that the owners of one or
more monopolistic undertakings are indulging in
any monopolistic trade practice, or that
monopolistic trade practices prevail in respect of
any goods or services, the government may refer
the matter to the MRTP Commission for an inquiry
and the commission shall, after such hearing as it
thinks fit, report to the Central Government its
findings thereon.

11. 2. The Commission may make such an inquiry also
on its own motion. If such an inquiry finds that any
monopolistic trade practice operates or is likely to
operate against the public interest, the Central
Government may pass such an inquiry also on its
own motion. If such an inquiry finds that any
monopolistic trade practice operates or is likely to
operate against the public interest, the Central
Government may pass such an orders as it may
think fit to remedy or prevent any mischiefs which
result or may result from such trade practice.

12. 3. Any order made by the Central Government in this
regard may include an order:
1. Regulating the production, storage, supply, distribution
or control of any goods by the undertaking or the control
or supply of any service by it and fixing the terms of sale
(including prices) or supply thereof
2. Prohibiting the undertaking from resorting to any act or
practice or from pursuing any commercial policy, which
prevents or lessens, or is likely to prevent or lessen,
competition in the production, supply or distribution of
any goods used or produced by the undertaking;
3. Fixing standards for the goods used or produced by the
undertaking.

13. 4. Declaring unlawful, except to such extent and in such
circumstances as may be provided by or under the
order, the making or carrying out of any such agreement
as may be specified or described in the order.
5. Requiring any party to any such agreement as may be
so specified or described to terminate the agreement
within such time as may be so specified, either wholly or
to such an extent as may be so specified.

14. Control of Restrictive Trade Practice
A restrictive trade practice is a trade practice which
has the effect, actual or probable of restricting,
lessening or destroying competition. Such trade
practices may tend to obstruct the flow of
production or to bring about manipulation of prices
or conditions of delivery etc. to the common
detriment.
The distinction between the two is based, perhaps, on
the Monopolies Inquiry Commission, which
confined the word “restrictive trade practices” to
mean restrictive trade practices other than those
pursued by monopolist.

15. Possible Restrictive Trade Practices
1. Concert or Collusion/Cartels
2. Price Discrimination
3. Predatory Pricing
4. Tie-up sales
5. Full-line Forcing
6. Exclusive Dealing
7. Area Restriction
8. Resale Price Maintenance

16. UNFAIR TRADE PRACTICES
• MISLEADING ADVERTISEMENT AND FALSE REPRESENTATION
• BARGAIN SALE, BAIT AND SWITCH-SELLING
• OFFERING OF GIFTS AND PRIZES WITH THE INTENTION OF
NOT PROVIDING THEM
• PRODUCT SAFETY STANDARDS
• HOARDING OR DESTRUCTION OF GOODS
• DISPARAGING GOODS, SERVICES OR TRADE OF COMPETITORS
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17. APPLICABILITY OF THE MRTP ACT
• ALL UNDERTAKINGS ENGAGED IN MANUFACTURE, SUPPLY
AND DISTRIBUTION IN THE PRIVATE SECTOR
• PUBLIC SECTOR UNDERTAKINGS OWNED BY THE GOVERNMENT
OR GOVERNMENT UNDERTAKINGS
• STATUTORY CORPORATIONS
• UNDERTAKINGS UNDER THE MANAGEMENT OF CONTROLLERS
APPOINTED BY LAW
• COOPERATIVE SOCIETIES
• FINANCIAL INSTITUTIONS, BANKS
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18. MRTP COMMISSION
THE AUTHORITY OF THE COMMISSION INCLUDES THE POWER
• TO DIRECT AN UNDERTAKING TO DISCONTINUE A TRADE
PRACTICE
• TO PASS A CEASE AND DESIST ORDER
• TO GRANT TEMPORARY INJUNCTION
• TO AWARD COMPENSATION
• TO DIRECT PARTIES TO AGREEMENTS TO MODIFY THE
SAME
• TO DIRECT PARTIES TO ISSUE CORRECTIVE
ADVERTISEMENTS
• TO RECOMMEND TO CENTRAL GOVERNMENT, DIVISION OF
UNDERTAKINGS OR SEVERANCE OF INTER-CONNECTION
BETWEEN UNDERTAKINGS
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19. MRTP Commission
In accordance with the provisions of the Act, the
Government of India has set up a Commission
known as the Monopolies and Restrictive Trade
Commission. The Act provides that the
Commission shall consists of a chairman, and not
less than two and not more than eight other
members, to be appointed by the Central
Government. The chairman shall be a person who
has the qualification to be a judge of a Supreme
Court or of a High Court, and the members thereof
shall be persons of ability, integrity and standing,
who have adequate knowledge or experience of,
or have shown capacity in dealing with problems
relating to economics, law, commerce,
accountancy, industry, public affairs or

20. The Act empowers the Central Government to
appoint a Director General of Investigation and
Registration, and as many Additional, Joint,
Deputy or Assistant Directors-General of
Investigation and Registration, as it may think fit,
to conduct investigations for the purposes of this
Act, and for maintaining a register of agreements
subject to registration under this Act, and for
performing such other functions as are, or may be,
provided by, or under this Act.

21. Jurisdiction and Powers of the Commission
The MRTP Commission is vested with powers to
inquire into restrictive, monopolistic and unfair
trade practices.
The commission may inquire into any restrictive trade
practice either on the application of the Director
General of Investigation or upon a reference made
to it by the Central or a State Government, or on
receiving complaint from any trade or consumer
association having a membership of not less than
25 persons or 25 or more consumers, or upon its
own knowledge or information.

22. For the purpose of an inquiry under this Act, the
commission has the same powers as are vested
in a Civil Court under the Civil Procedure Code,
1908, in respect of;
1. Summoning a witness and his examination on
oath;
2. Discovery and production of evidence;
3. Reception of evidence on affidavits;
4. Requisitioning public records from a court or an
office; and
5. Issuing a commission for the examination of a
witness.

23. INVESTIGATION AND ENQUIRIES
ACTION CAN BE INITIATED BY:
• AN INDIVIDUAL CONSUMER
• A REGISTERED ASSOCIATION OF CONSUMERS
• A TRADE ASSOCIATION
• DIRECTOR GENERAL, INVESTIGATION & REGISTRATION
• GOVERNMENT
• MRTP COMMISSION SUO MOTTO
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24. From MRTP to Competition
Law
 1991: Widespread economic reforms in
India – Aimed at Liberalisation, Privatisation
and Globalisation
 Changes felt necessary in MRTP Act
 Concentration of economic power to the
common detriment and control of
monopolies – de-emphasised
 Pre-entry restrictions (prior approval of
government), expanding existing
undertaking, M&A‟s, takeovers – deleted
from Act
7Up2 Meeting, June 27-28, 2006,
Bangkok.

25. Further Developments
 1999: Expert Group on interaction between
Trade and Competition Policy
recommended new competition law to
“promote fair competition and control
(eliminate) anti-competitive practices” in the
market
 2000: GoI High Level Committee on
Competition Law and Policy provided a
draft Competition law.
 2002:The Competition Act legislated
7Up2 Meeting, June 27-28, 2006,
Bangkok.

26. Competition Act 2002
 The Ministry of Corporate Affairs,
Government of India has issued a
has issued a Notification dated 28th August
2009, whereby the most controversial the
Monopolies and Restrictive Trade Practices
Act, 1969 (“the MRTP Act”) stands repealed
and is replaced by the Competition Act,
2002, with effect from September1,2009.

27. Transitional Provisions
 MRTP Commission
a) It will continue to exercise jurisdiction and power under the
repealed MRTP Act in respect of any case or proceeding filed
before 1 September 2009, for a period of two years. It will not,
however entertain any new case arising under the MRTP Act on or
after 1 September 2009.
b) Upon the expiry of the specified two year period, the MRTP
Commission shall stand dissolved.

28.  Transfer of pending cases
Upon the expiry of two years from 1 September 2009, cases
pending before the MRTP Commission will be transferred as
follows:-
a) Monopolistic or restrictive trade practice cases: All
pending cases pertaining to monopolistic or restrictive trade
practices, including cases having an element of unfair trade
practice, shall stand transferred to the Competition Appellate
Tribunal, which shall adjudicate such cases in accordance
with the provisions of the repealed MRTP Act.

29.  b) Unfair trade practice cases:
All pending cases relating solely to unfair trade
practices shall stand transferred to the National
Commission as constituted under the Consumer
Protection Act, 1986, which may in turn transfer such
cases to a State Commission constituted under the said
Act under circumstances it deems appropriate. These
cases will be dealt with by them in accordance with the
provisions of the Consumer Protection Act.

30.  Cases relating to giving false or misleading
facts disparaging the goods, services or trade
of another person under the MRTP Act:
All such pending cases shall be
transferred to the Competition Appellate
Tribunal which will be dealt in accordance
with the provisions of repealed MRTP Act.

31.  Investigations/proceedings undertaken by
the Director General under the MRTP Act
With effect from 1 September 2009, all pending
investigations and proceedings by the Director General
relating to:-
a) Monopolistic/ restrictive trade practices will be transferred
to the Competition Commission of India (CCI), who may
conduct such investigations/ proceedings in any manner it
deems appropriate.

32. b) Unfair trade practices will be transferred to the
National Commission under the Consumer
Protection Act 1986.
c) Cases giving false or misleading facts
disparaging the goods, services or trade of
another person will be transferred to the CCI.

33. THE COMPETITION ACT, 2002
What and how
WHAT?
Main Focus areas of the Act :
 Prohibition of Anti Competitive Agreements
 Prohibition of Abuse of Dominance
 Regulation of Combinations
 Competition Advocacy
HOW?
Through establishment of a Competition
Commission of India (CCI) and Competition
Appellate Tribunal (CAT)
7Up2 Meeting, June 27-28, 2006,
Bangkok.

34. FOCUS AREAS OF 2002 ACT - 1
A. PROHIBITION OF ANTI-COMPETITIVE
AGREEMENTS
 All Anti-competitive agreements are void, i.e.,
agreements which could restrict competition,
vertical or horizontal
 Rule of Reason to be applied for determining
legality of an agreement
 Certain agreements between same or similar
enterprises regarding prices or quantities, on
bidding, or to share or divide markets are per se
illegal
 Leniency provision – for whistleblowers in a cartel
(if disclosure is before prosecution)
7Up2 Meeting, June 27-28, 2006,
Bangkok.

35. FOCUS AREAS OF 2002 ACT - 1
EXCEPTIONS:
 Export cartels (problem is somewhere else!)
 Agreements permitted in law
 Agreements under IPR (not unreasonable
restrictions like patent pooling, price-fixing etc.)
RULE OF REASON TO BE APPLIED (factors):
 Creation of entry barriers
 Driving existing competitors out of the market
 Accrual of benefits to consumers
 Improvements in goods and services
 Increase in Technical development
7Up2 Meeting, June 27-28, 2006,
Bangkok.

36. FOCUS AREAS OF 2002 ACT - 2
B. PROHIBITION OF ABUSE OF
DOMINANT POSITION:
 Mere dominance is not an offence, abuse
of dominance is prohibited
 Important shift from „size‟ / „structure‟ to
„behaviour‟ / „conduct‟
 Instances of unfair, discriminatory or
predatory pricing; restricting quantities,
markets or technical development, etc. will
qualify
7Up2 Meeting, June 27-28, 2006,
Bangkok.

37. FOCUS AREAS OF 2002 ACT - 3
C. REGULATION OF COMBINATIONS:
 Includes M&A‟s, Amalgamations, Acquisitions of
control - all above a certain high level threshold
(Rs.1000 crore aggregate value of assets or
Rs.3000 crore turnover of combining parties)
 Thresholds deliberately high to allow small Indian
companies to combine to become active
international players
 Combinations that cause or are likely to cause an
adverse effect on competition are under focus
(e.g., horizontal mergers between competitors;
vertical merger by dominant player with firm in
adjacent market, etc.)
 Pre-notification voluntary
7Up2 Meeting, June 27-28, 2006,
Bangkok.

38. FOCUS AREAS OF 2002 ACT - 4
D. COMPETITION ADVOCACY:
 CCI to create “culture of competition”
 Empowered to participate in formulation of
country‟s economic policies
 Create awareness and training on
competition issues
 Establishment of “Competition Fund” for
above
 Recently asked to develop Consultation
Paper on National Competition Policy (to
harmonise various government policies)
7Up2 Meeting, June 27-28, 2006,
Bangkok.

39. COMPETITION COMMISSION
OF INDIA (CCI)
 Adjudicative wing distinct from Investigative
and Prosecution wing
 Allows appointment of economists, lawyers,
other professionals as investigators
(departure from practice of appointing retd.
bureaucrats)
 UTPs removed from the purview of Act and
all pending cases transferred to the
Consumer Protection Act, 1986 (CPA)
 Phased introduction of Act – competition
advocacy (Y1); Anti-Competitive Practices
and Abuse of Dominance (Y2);
7Up2 Meeting, June 27-28, 2006,
Combinations (Y3) Bangkok.

40. COMPETITION APPELLATE TRIBUNAL
(CAT)
 Established after intervention by Supreme Court
of India – to retain “judicial powers” within the
judicial system
 CAT to hear and dispose appeals against any
direction issued or decision made or order
passed by CCI
7Up2 Meeting, June 27-28, 2006,
Bangkok.

41. Competition Act V/S MRTP ACT
MRTP Act, 1969 Competition Act, 2002
Based on the pre-reforms scenario Based on the post-reforms
scenario
Based on size as a factor Based on structure as a factor
Competition offences implicit or not Competition offences explicit and
defined defined
Complex in arrangement and Simple in arrangement and
language language and easily
comprehensible
14 per se offences negating the 4 per se offences and all the rest
principles of natural justice subjected to rule of reason
Frowns upon dominance Frowns upon abuse of dominance

42. MRTP Act, 1969 Competition Act, 2002
Registration of agreements No requirements of registration of
compulsory agreements compulsory
No combinations regulation Combinations regulated beyond a
threshold limit
Competition Commission Competition Commission selected
appointed by the Government by a Collegium (search committee)
Very little administrative and Relatively more autonomy for the
financial autonomy for the Competition Commission
Competition Commission
No competition advocacy role for Competition Commission has
the Competition Commission competition advocacy role

43. MRTP Act, 1969 Competition Act, 2002
No penalties for offences Penalties for offences
Reactive and rigid Proactive and fliexible
Unfair trade practices covered Unfair trade practices omitted
(consumer fora will deal with them)
Does not vest MRTP Commission Competition Law seeks to regulate
to inquire into cartels of foreign them.
origin in a direct manner.
Concept of Group Act had wider Concept has been simplified
import and was unworkable