Page 187 - DMGT401Business Environment

Business Environment

Notes 7. Resale Price Maintenance: This means not allowing resale below certain price or not to
sell above a particular price. If maximum price is indicated, the dealer should be free to
charge below the indicated price.
8. Restriction on Output or Supply: This means an agreement to limit, withhold or restrict
the output or supply or any goods or allocate any market or areas for disposal of goods.

9. Restriction on Manufacturing Process: This means an agreement not to use a particular
method, machinery or process in the manufacture of goods.
10. Price Control Arrangement: This means an agreement to sell goods with a view to eliminate
competition or any competitor.
11. Restriction on Buying: To restrict the class or number of wholesalers, producers or suppliers
for whom goods may be bought is an restrictive trade practices.
12. Collective Bidding: This means an agreement among the contenders for bid to be offered
at auction or not to be bid at auction.

13. Agreement Declared by government to be restrictive: The government has powers to declare
any agreement as restrictive on the recommendation of the Commission.
Besides all these, many others are treated as RTP.

Example: Such as Dumping of goods, deficiency in insurance services, insisting on
collection of gas cylinders from shop, accepting deposits for supply without any possibility of
supply, not providing a house as promised, failure to refund deposits, wide variations in prices
in different regions, etc., are treated as restrictive trade practices.

Investigation into RTP

The MRTP commission will enquire into any RTP. If it finds that the trade practice is prejudicial
to public, the Commission may give the following directions:
1. the practice shall be discontinued or shall not be repeated

2. agreement relating to RTP shall be modified as may be specified by MRTP Commission.

8.1.3 Monopolistic Trade Practices (MTP)

A Monopolistic Trade Practice is one that has or is likely to have any of following effects:
1. Limiting or controlling production, supply or distribution of goods or services and thereby
maintaining price of goods or charge or service at an unreasonable price.
2. Unreasonably preventing or lessening competition.
3. Limiting technical development or capital investment or allowing quality of goods or
services to deteriorate.
4. Unreasonably increasing prices of goods or services.
5. Unreasonably increasing the cost of production or charges for any services.
6. Unreasonably raising the profits on production, supply or distribution of goods or services.

7. Adopting unfair or deceptive methods to reduce or prevent competition in goods or
services.

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