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Monopolistic and Restrictive Trade Practice


Monopolistic Trade Practices

A monopolistic trade practice is one, which has or is likely to have the effect of:

  1. maintaining the prices of goods or charges for the services at an unreasonable level by limiting, reducing or otherwise controlling the production, supply or distribution of goods or services;

  2. unreasonably preventing or lessening competition in the production, supply or distribution of any goods or services whether or not by adopting unfair method or fair or deceptive practices;

  3. limiting technical development or capital investment to the common detriment;

  4. deteriorating the quality of any goods produced, supplied or distribute; and

  5. increasing unreasonably -

    1. the cost of production of any good; or

    2. charges for the provision, or maintenance, of any services; or

    3. the prices for sale or resale of goods; or

    4. the profits derived from the production, supply or distribution of any goods or services.

A monopolistic trade practice is deemed to be prejudicial to the public interest, unless it is expressly authorized under any law or the Central Government permits to carry on any such practice.

 

Inquiry into Monopolistic Trade Practices

The Commission may inquire into

Any monopolistic trade practice,

  • Upon a reference made to it by the Central Government or

  • Upon an application made to it by the Director General or

  • Upon it own knowledge or information

Relief Available

  1. Where the inquiry by the Commission reveals that the trade practice inquired into operates or is likely to operate against public interest, the Central Government may pass such orders as it thinks fit to remedy or present any mischief resulting from such trade practice.

  2. On an inquiry report of the Commission, the Central Government may-

    1. Prohibit the owner(s) of the concerned undertaking(s) from continuing to indulge in a monopolistic trade practice; or

    2. Prohibit the owner of any class of undertakings or undertakings generally, from continuing to indulge in any monopolistic trade practice in relation to the goods or services.

  3. The Central Government may also make an order:

    1. Regulating the production, storage, supply, distribution, or control of any goods or services by an undertaking and fixing the terms of their sale (including prices) or supply;

    2. Prohibit any act or practice or commercial policy which prevents or lessens competition in the production, storage, supply or distribution of any goods or services;

    3. Fixing standards for the goods used or produced by an undertaking;

    4. Declaring unlawful the making or carrying out of the specified agreement;

    5. Requiring any party to the specified agreement to determine the agreement within the specified time, either wholly or to specified extent;

    6. Regulating the profits which may be derived from the production, storage, supply, distribution or control of any goods or services; or

    7. Regulating the quality of any goods or services so that their standard does not deteriorate.



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