Similarities Between The MRTP Act And The Competition Act
The MRTP Act was a precursor to the Competition Act and sought to legislate over issues relating to restrictive and monopolistic trade practices. There are areas of similarities between the MRTP Act and the Competition Act. The primary distinction between the enactments stems from the legislative objec¬tive. While the thrust of the Competition Actis to promote competition, the objective of the MRTP Act was to prevent economic concentration and restrictive trade practices.
Even in respect of merger control provisions currently found in the Competition Act, the MRTP Act used concentration of economic power as the basis of merger control. Chapter III of the MRTP Act sought to regulate activities of undertakings whose asset value crossed certain
financial thresholds. These undertakings were typically called MRTP companies. MRTP companies were under obligation to seek prior approval of the Government before expanding their operations in any manner including through merger and acquisitions. This, in addition to acting as a check on abuse of dominance also acted as a merger control provision. However, the emphasis on economic concentration got removed in 1991.
Chapter IV of the MRTP Act dealt with Monopolistic Trade Practice. The MRTP Commission was empowered to inquire into the workings of an undertaking if it was of the opinion that such an undertaking was engaged in monopolistic or restrictive trade practices. The MTP provision under the MRTP Act bears a similarity to the concept of abuse of dominance under the Competition Act. MTP was defined in the Section 2 (i) of the MRTP Act and it inter alia characterized the following as MTP - maintaining prices at an unreasonable level, unreasonably preventing competition, limiting technical development, allowing deteriorating quality, and increasing cost of
Even in respect of merger control provisions currently found in the Competition Act, the MRTP Act used concentration of economic power as the basis of merger control. Chapter III of the MRTP Act sought to regulate activities of undertakings whose asset value crossed certain
financial thresholds. These undertakings were typically called MRTP companies. MRTP companies were under obligation to seek prior approval of the Government before expanding their operations in any manner including through merger and acquisitions. This, in addition to acting as a check on abuse of dominance also acted as a merger control provision. However, the emphasis on economic concentration got removed in 1991.
Chapter IV of the MRTP Act dealt with Monopolistic Trade Practice. The MRTP Commission was empowered to inquire into the workings of an undertaking if it was of the opinion that such an undertaking was engaged in monopolistic or restrictive trade practices. The MTP provision under the MRTP Act bears a similarity to the concept of abuse of dominance under the Competition Act. MTP was defined in the Section 2 (i) of the MRTP Act and it inter alia characterized the following as MTP - maintaining prices at an unreasonable level, unreasonably preventing competition, limiting technical development, allowing deteriorating quality, and increasing cost of