The MRTP full form is Monopolistic and Restrictive Trade Practices. The MRTP Act was established in 1969 to ensure that the operation of the economic system does not lead to the concentration of economic power in a few hands only. The law, therefore, ensures that monopolies are controlled and that restrictive and monopolistic business practices are prohibited. The act is applicable to all states of the country except Jammu and Kashmir.
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What are the Objectives of MRTP?
The following are the objectives of the MRTP Act:
- The law ensures that the operation of the economic system does not lead to the concentration of economic power in a few hands only
- It provides for monopolies control
- MRTP Act regulates the monopolistic and restrictive trade practices
- As per the amendment in 1984, the 4th objective is the regulation of unfair trade practices
What are the Practices that MRTP Regulate?
The following are the practices that MRTP regulates:
Monopolistic Trade Practices – This includes the misuse of one’s hold in the market to abuse the functioning with respect to the production and sales of goods and services. The following are the practices under this term:
- Eliminating and Preventing Competition
- Take advantage of their monopoly and charge customers unreasonably high prices
- Deteriorate the quality of products and services
- Limit technical development
- Adopt unfair practices
Restrictive Trade Practices – To gain power in the market and maximize profits, traders often adapt the practices to block the flow of capital in the production process. They also bring conditions for delivery to affect the supply which leads to unjustified costs
Unfair Trade Practices – This includes:
- A false representation of second-hand goods and new goods
- A false representation of the quality, style standard, usefulness and need of the goods
- Misleading claims and representation in the price of goods and services
- Untrue facts are given on affiliation and sponsorship etc
- Untested claims warranties and guarantees in the goods and services
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