Scribd
Upload
6K views

Restrictive & Unfair Trade Practices

The document discusses restrictive trade practices, unfair trade practices, and anti-competitive agreements under Indian law. Restrictive trade practices refer to tying arrangements that require purchasing one product to obtain another. Unfair trade practices involve misleading advertisements or false representations. Anti-competitive agreements that negatively impact competition are prohibited, such as exclusive supply or distribution agreements between enterprises.

Uploaded by

Surya Agarwal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
6K views

Restrictive & Unfair Trade Practices

The document discusses restrictive trade practices, unfair trade practices, and anti-competitive agreements under Indian law. Restrictive trade practices refer to tying arrangements that require purchasing one product to obtain another. Unfair trade practices involve misleading advertisements or false representations. Anti-competitive agreements that negatively impact competition are prohibited, such as exclusive supply or distribution agreements between enterprises.

Uploaded by

Surya Agarwal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 23

Restrictive Trade

Practices

1
Meaning and Definition
Section 2(1)(nn) of the Consumer Protection
Act, 1986 provides that, “restrictive trade
practice” means “any trade practice which
requires a consumer to buy, hire or avail of
any goods or, as the case may be,
services as a condition precedent for
buying, hiring or availing of other goods or
services”.

2
• Technically, this type of arrangement is
called ‘tie-up sales’ or ‘tying arrangement’.
• Case: re. T.T. (P.) Ltd. Sale of pressure
cooker along with separators.
• A, a gas distributor insisted his customers
to buy gas stove as a condition to give gas
connection. It was held that it was a
restrictive trade practice - Re. Anand Gas
3
• However, where there is no such
precondition and the buyer is free to take
either product, no tying arrangement could
be alleged even though the seller may
offer both the products as a single unit at a
composite price.

4
• Example : A is a furniture dealer. He is
selling Sofa at Rs. 20,000 and Bed at
Rs. 15,000. He has an offer that whoever
will buy Sofa and Bed both, he will charge
Rs. 30,000 only. Here the choice is open
to the customer to buy the products single
or composite. This is not a restrictive trade
practice.

5
Unfair Trade
Practices

6
Meaning and Definition
• “Unfair trade practice” means a trade
practice which, for the purpose of
promoting the sale, use or supply of any
goods or for the provision of any service,
adopts any unfair method or unfair or
deceptive practice including any of the
following practices, namely—

7
Misleading Advertisement and False
Representation with respect to :
• goods are of a particular standard,
quality, quantity, grade, composition,
style or model.
• services are of a particular standard,
quality or grade.
• re-built, second-hand, etc. are new
goods.
• goods or services have sponsorship,
approval
8
• supplier has a sponsorship
• concerning the need or usefulness
(Listerine Case).
• warranty or guarantee not based upon
adequate and proper tests (Foam
mattresses guaranteed for 25 years).
• price at which a product or like products or
goods have been, or are ordinarily sold.
• disparaging the goods, services or trade of
another person.

9
Cases
• Tatia Finance and Leasing Ltd. re
(1991): Deposit of Rs.10,000/- with it
would become Rs.3,34,357 in 25 years
amounting to a return of 129 per cent per
annum.
• The Body Wrap Company Case:
Treatment would reduce his/her weight by
two and a half kg. and the size of the body
from 5 to 15 inches in just one hour.

10
• The Accupressure Therapy Health
Centre, re (1986) : To improve the blood
circulation and keep the users healthy;
walk on the chappals for 8 minutes every
morning; evening before meals; therapy
had the approval of the World Health
Organisation.

11
• Bargain Sale, Bait and Switch Selling
• Offering Gifts or Prizes with the intention
of not providing them and conducting
Promotional Contests
• Does a surrogate advertisement constitute
an unfair trade practice?
Case: McDowell & Co. Ltd., In re (1997)
• Product Safety Standards
• Hoarding or Destruction of Goods

12
Anti Competitive Agreements

Competition Act, 2002

13
• Section 3 of the Competition Act, 2002
• No enterprise or person shall enter into any
agreement in respect of production, supply,
distribution, storage, acquisition or control of
goods or provision of services, which causes or
is likely to cause an appreciable adverse effect
on competition within India.
• This rule applies to association of enterprises
and association of persons while entering into
any such agreement [Section 3(1)]

14
• An agreement which causes or is likely to
cause an appreciable adverse effect on
competition, includes the following
agreements :
(a) bid rigging/ knock out agreement
(b) tie-in arrangement;
(c) exclusive supply agreement;

15
(d) exclusive distribution agreement;
(e) refusal to deal
(f) resale price maintenance

16
Bid rigging/knock out
agreement
• ‘Bid rigging’ means
• any agreement,
• between enterprises or persons engaged
in identical or similar production or trading
of goods or provision of services,
• which has the effect of eliminating or
reducing competition for bids or adversely
affecting or manipulating the process for
bidding.
17
Tie-in arrangements

• Already discussed under ‘Restrictive


Trade Practice’

18
Exclusive supply agreement
• Exclusive supply agreement includes
any agreement restricting in any
manner the purchaser in the course of
his trade from acquiring or otherwise
dealing in any goods other than those
of the seller or any other person. For
example, insisting that a dealer of Sony
products will not deal in Samsung or
LG products.
19
Exclusive distribution
agreement
• Exclusive distribution agreement
includes any agreement to limit, restrict or
withhold the output or supply of any goods
or allocate any area or market for the
disposal or sale of the goods. In other
words, dealer is not allowed to distribute
his products in an area other than the one
allotted to him.

20
Refusal to deal
• Refusal to deal includes any agreement
which restricts, or is likely to restrict, by
any method the persons or classes of
persons to whom goods are sold or from
whom goods are bought.
• e.g: Refusing to deal with non- members
of an Association, say truckers’ union
• Nalli Sarees Case

21
Resale price maintenance
• It includes—any agreement to sell goods
on condition that the prices to be charged
on the resale by the purchaser shall be the
prices stipulated by the seller unless it is
clearly stated that prices lower than those
prices may be charged.
• Bata’s case

22
Exceptions to Anti competitive
agreement
• Registered Patents, Copy Rights, Designs
etc.

You might also like