Restrictive trade practices in India, 1969 -91: experience of control and agenda for further work

Abstract

This paper purports to apprise principally the experience of control of Restrictive Trade Practices (RTP) in India by the Monopolies and Restrictive Trade Practices (MRTP) Commission under the MRTP Act, 1969. This experience is examined by the Commission since the enactment of this legislation till 1991 to which the latest published information relates. Among the major findings are: 1. Of the 3,474 RTP inquiries instituted during 1972-91, only 2 (0.05 per cent) were instituted upon reference from government, and 171 (5 per cent) from trade/consumer associations, etc. The principal burden of initiating inquiries has fallen on the Director-General and the Commission with 2,186 and 1.115 inquiries (63 and 32 per cent) respectively to their credit. 2. Of the 3,033 inquiries disposed of during 1972-91, 1,125 (37 per cent) were found by the Commission to prejudicial to public interest and subjected to cease/desist or consent order, and 1,908 (63 per cent) were disposed of otherwise. 3. Of the different types of RTP in the inquiries disposed of during 1982-91, 1,328 out of a total of 3,415 (39 per cent) were found by the Commission to be prejudicial to public interest, and subjected to cease/desist or consent order, and 2,087 (61 per cent) were disposed of otherwise. 4. Thus, the number of inquiries in, and of RTP against, which prejudice to public interest was found were each small, nearly two-fifths of the respective totals. Based on this experience, as a second objective, this paper also presents an agenda for further work in this area. The major points which emerge in that context are: 1. The 1984 and the 1991 amendments to the MRTP Act necessitate a new preamble or a major change in the existing preamble. Two alternative draft preambles are suggested in the paper. 2. For further and better particulars on the inquiries disposed of, the present pro-forma in which the information is given needs to be modified as per the details given in the paper. 3. Specific studies relating to the composition of RTP inquiries disposed of, the efficacy of RTP control, and the general effects on the public interest of certain RTP as such as also with reference to some products/services are called for to increase our knowledge on this subject and also for their possible policy value. 4. The evidence on the arguments for a change in favour of per se approach are not yet sufficiently persuasive, so it is as well that the present rule-of-reason approach continues.