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Writer's pictureAbhilasha Sharma

What entails Unfair trade practices-and how to challenge in a court of law?



What is unfair trade practices?


Unfair trade practices refer to deceptive, fraudulent, or unethical business activities that give one party an unfair advantage over others in the marketplace. These practices can harm consumers, competitors, and the overall integrity of the market. Unfair trade practices can take various forms, and they may include:


  1. False Advertising: Making false or misleading claims about a product or service to deceive consumers.

  2. Price Fixing: Colluding with competitors to set prices artificially high, restricting competition and harming consumers.

  3. Bait-and-Switch: Advertising a product at a low price to attract customers, only to substitute it with a higher-priced item when the customer expresses interest.

  4. Deceptive Packaging: Misleading consumers through deceptive packaging, labeling, or product descriptions.

  5. Dumping: Selling products in another country at prices lower than their production cost or lower than the prices in the home market, often to gain a competitive advantage.

  6. Monopolistic Practices: Abusing a dominant market position to eliminate or control competition unfairly.

  7. Tying and Bundling: Forcing consumers to buy one product as a condition for purchasing another, limiting their freedom of choice.

  8. Predatory Pricing: Deliberately setting prices below cost to drive competitors out of the market and establish a monopoly.


What laws govern unfair trade practices?

India:

  • In India, the Competition Act of 2002 addresses issues related to anti-competitive practices, abuse of dominance, and regulation of combinations. The Consumer Protection Act of 2019 also addresses unfair trade practices from the perspective of protecting consumer rights.


What is the history of the competition act 2002 in India?

The Competition Act of 2002 is a comprehensive legislation in India that addresses issues related to competition, anti-competitive practices, and the regulation of combinations (mergers and acquisitions). The Act replaced the Monopolies and Restrictive Trade Practices Act, 1969, and marked a significant shift towards modernizing and strengthening the country's competition law framework.

Here's a brief overview of the history of the Competition Act, 2002, in India:

  1. Background:

  • The Monopolies and Restrictive Trade Practices (MRTP) Act, 1969, was the primary legislation dealing with issues of competition and restrictive trade practices in India. However, over time, it was perceived as outdated and inadequate in addressing the challenges posed by evolving economic conditions.

  1. Setting up the Raghavan Committee:

  • In 1999, the government constituted a committee headed by S.V.S. Raghavan to review and suggest amendments to the MRTP Act. The committee recommended the repeal of the MRTP Act and the introduction of a modern competition law regime.

  1. Drafting the New Legislation:

  • Based on the recommendations of the Raghavan Committee, the government drafted a new competition law, leading to the Competition Bill of 2001. The bill underwent several revisions and consultations to address various concerns and perspectives.

  1. Enactment of the Competition Act, 2002:

  • The Competition Act, 2002, was passed by the Indian Parliament and received the President's assent on January 13, 2003. The Act came into effect on May 20, 2003, establishing the Competition Commission of India (CCI) as the regulatory body responsible for enforcing the provisions of the Act.

  1. Key Objectives and Provisions:

  • The Competition Act, 2002, aimed to promote fair competition, prevent anti-competitive practices, and ensure the freedom of trade in the Indian market. It covers a wide range of activities, including anti-competitive agreements, abuse of dominant position, and regulation of combinations.

  1. Amendments:

  • The Act has undergone amendments to address emerging challenges and align with international best practices. Notable amendments include those in 2007, 2009, 2012, and 2019, which introduced changes to enhance the effectiveness of the competition law framework.

The Competition Act, 2002, and its subsequent amendments have played a crucial role in promoting a competitive and fair market environment in India. The Competition Commission of India (CCI) continues to enforce the provisions of the Act, addressing anti-competitive behavior and safeguarding the interests of consumers and competitors.


What is the procedure to file the suit for unfair trade practices?

The procedure for filing a suit for unfair trade practices can vary depending on the jurisdiction and legal system in place. Below is a general guideline that outlines the typical steps one might take when filing a complaint related to unfair trade practices. Keep in mind that it's essential to consult with a legal professional for advice tailored to your specific situation and jurisdiction:


Step 1:Consultation with an Attorney:

Before initiating any legal action, it is advisable to consult with an attorney who specializes in commercial or trade law. They can provide guidance on the specific laws applicable to your case and help you assess the merits of your claim.


Step 2:Document the Unfair Trade Practices:

Gather evidence and document instances of unfair trade practices. This may include contracts, communications, advertising materials, and any other relevant documents that support your case.


Step 3:Identify the Appropriate Forum:

Determine the appropriate legal forum or regulatory body where you should file your complaint. In many jurisdictions, there are specialized bodies or courts that handle cases related to unfair competition or trade practices.


Step 4:Draft a Complaint:

Work with your attorney to draft a formal complaint outlining the details of the unfair trade practices, the parties involved, and the legal basis for your claim. The complaint should conform to the procedural requirements of the relevant court or regulatory body.


Step 5:File the Complaint:

Submit the complaint to the appropriate court or regulatory body. This may involve paying filing fees and adhering to specific filing procedures. Your attorney can assist in ensuring that all necessary documents are submitted correctly.


Step 6:Serve Notice to the Opposing Party:

After filing the complaint, the opposing party (defendant) must be served with notice of the legal action. This is typically done by delivering a copy of the complaint along with a summons, notifying them of the legal proceedings.


Step 7:Response from the Opposing Party:

The defendant has a specified period to respond to the complaint. They may file an answer, raising defenses or disputing the allegations. The legal process will then move forward based on the responses from both parties.


Step 8:Discovery Process:

The discovery process allows both parties to gather additional evidence through methods such as depositions, interrogatories, and document requests.


Step 9:Pretrial Proceedings:

The court may hold pretrial conferences to address procedural matters, encourage settlement discussions, or narrow down the issues for trial.


Step 10:Trial:

If a resolution is not reached through settlement or other means, the case proceeds to trial. During the trial, both parties present their evidence and arguments.


Step 11:Judgment:

The court will issue a judgment based on the evidence presented and legal arguments. Remedies may include damages, injunctions, or other relief as deemed appropriate.


It's important to note that the specific steps and procedures can vary widely depending on the jurisdiction and the nature of the case. Legal advice and representation are crucial throughout the process to navigate the complexities of the legal system effectively.


What are the Significant case laws of unfair trade means?



MRTP Commission v. Hindustan Lever Ltd. (1995):

  • This case in India involved allegations of unfair trade practices against Hindustan Lever Ltd. The Monopolies and Restrictive Trade Practices Commission (MRTPC) held that Hindustan Lever was engaged in unfair trade practices by offering a discount scheme that was found to be misleading and deceptive to consumers.


Reckitt Benckiser (India) Ltd. v. Hindustan Unilever Ltd. (2000):

  • This case in India involved a dispute between two FMCG (Fast Moving Consumer Goods) companies regarding comparative advertising. The court held that Reckitt Benckiser's advertisements were misleading and constituted unfair trade practices.

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