Difference between MRTP Act and Competition Act

180 votes

Monopolies and Restrictive Trade Practices Act, 1969 and the Competition Act, 2002 are both statutes enacted by the legislature to cover the same field of law and tackle specific issues in the economy. While the MRTP Act, as the name suggests, was first introduced to prevent formation of monopolies and other such restrictive and unfair trade practices for the welfare of the smaller players in the market. The Competition Act on the other hand was in fact brought in replacing the MRTP Act and shifted the focus to regulating and promoting healthy competition for welfare of every player in the economy. Thus, the differences between the two statutes is immense since the Competition Act is an evolution of the MRTP Act, enacted to meet with the demands of changing times and the shortcomings of the MRTP Act.
 

What is MRTP Act?

The Monopolies and Restrictive Trade Practices Act, 1969 was enacted as the first statute regulating competition in the Indian economy and was aimed at reforms to prevent concentration of power. The MRTP Act sought to prevent any form of monopolistic activities and other such practices which were deemed as restrictive and/or unfair. The MRTP Act elaborated and gave meaning to monopolistic as also restrictive practices and provided a list of offences which was against healthy competition in the economy.
 

What is Competition Act?

The Competition Act was brought in by the legislature to overcome the shortcomings of the MRTP Act and replace the old law which occupied the field of competition law in the pre-liberalisation and pre-globalisation era. The Competition Act shifted the focus from prevention of monopolies to creating a purpose-built commission charged with the task of regulating competition and preventing ant such activities which adversely affect competition in any industry in the economy.
 

What are the Differences between MRTP Act and Competition Act?

The following are the differences between the MRTP Act and Competition Act:

1.       The MRTP Act, as the name suggests, was enacted with a focus on preventing the formation of monopolies and accumulation of wealth and power in a small portion of the economy. The Competition Act on the other hand saw a shift in focus from monopolies to promoting and regulating healthy competition among the players in the economy.
 

2.       The MRTP Act was characterised as being reformatory in its approach, whereas the Competition Act is rather punitive in nature.
 

3.       The MRTP Act was focused on taking care of the interests of the consumers. On the other hand, the Competition Act shifted this focus on the larger interest of public welfare.
 

4.       The MRTP Act sought to prevent the domination of monopolistic firms that were deemed dominant due to their great size. Conversely, the Competition Act determines the dominance enjoyed by a firm not from its size but rather its structure.
 

5.       While the MRTP Act introduced a total of 14 offences, the Competition Act on the other hand only recognises 4 offences. Further, although the MRTP Act listed out these offences, it did not lay down any specific corresponding penalties, whereas the Competition Act even provides for the specific penalty for each offence.
 

6.       The MRTP Act was based on the pre-liberalisation and pre-globalisation era, whereas the Competition Act enacted in 2002 focused on a reformed economy post liberalisation and globalisation.
 

7.       The MRTP Act deemed any firm enjoying a dominant position as troublesome, whereas the Competition Act does not find issue with the dominant position of a firm but seeks to penalise the actual abuse of such dominant position by a firm. 

LawRato LawRato

842 votes

The Judiciary is a system of courts which interpret and apply the law. ... The Supreme Court, also known as the Apex Court, is the top court and the last appellate court in India, and the Chief Justice of India is its top authority.

Advocate Anupam Kumar Mishra LawRato

318 votes

The MRTP Act was created to regulate unfair trade practices, monopolies and business. The main goal of the Competition Act is to maintain business freedom and promote competition. The size of the company determines the amount.

Advocate Chikirsha Mohanty LawRato