Competition Act 2002

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Evolution of laws regarding unfair trade practices:

  • To regulate advertising, in 1984, Parliament inserted a chapter on unfair trade practices in theMonopolies and Restrictive Trade Practices Act, 1969 (MRTP)
  • Under the MRTP Act, any person or trader (business entity) could approach the MRTP Commission against an unfair trade practice
  • The Consumer Protection Act (CPA) was enacted two years later and it intended to give protection to consumers against unfair trade practices, but the remedy under the CPA has remained dormant
  • So, following changes worldwide, need was felt for a comprehensive law against monopolies and anti-competition business activities
  • On the recommendations of a committee, the Competition Act, 2002 was enacted and it repealed the MRTP Act, 1969.  And it excluded unfair trade practices from the draft bill as it did not want to dilute the thrust of the law from anti-competition activities
Need of a new separate law:
  • In case of CPA,  only a consumer can approach a consumer forum for a remedy
  • A company is not a consumer and thus cannot approach a consumer forum complaining of unfair trade practices
  • A business entity must be provided protection against unfair trade practices and a mechanism to claim remedies
  • As law has evolved, the subject of unfair trade practices has fallen in the gap between the competition law and consumer protection
  • A separate legislation and a statutory body like the Competition Commission are imperative to foster fair trade practices in the economy