LIBERALISATION AND LAW ON COMPARATIVE ADVERTISING IN INDIA

With the liberalisation and globalisation of the Indian economy, as could beexpected, firms have been aggressively and vigorously promoting theirproducts and services. These practices raise questions about truthfulness andfairness of representation of products and services. Not only the consumersbut even the firms need adequate law against unfair trade practices to havesome rules of the game for competing among themselves. In a competitiveenvironment, every representation of a product or service, is about whatothers are not. The Monopolies and Restrictive Trade Practices Act, 1969, (MRTP) wasenacted to prevent monopolies and restrictive trade practices in the economy.In 1984, the MRTP Act was amended to add a chapter on Unfair TradePractices. The MRTP Act created a body called the Director General ofInvestigation and Registration (DGIR). On a complaint, or on its own, theDGIR could investigate into a claim of a restrictive or unfair trade practice.The MRTP creates a judicial body called the Monopolies and Restrictive TradePractices Commission (MRTPC). The DGIR was to take cases before thebenches of theCommission. The Commission, on judging a practice to be anunfair trade practice, could order the offending party to cease and desist the practice. Section 36 A of the Act lists several actions to be an unfair trade practice. The provision which pertains to comparative representation is contained in Section 36 A(1)(x). Section 36-A. .... 'unfair trade practice' means a trade practicewhich, for the purpose of promoting the sale, use or supply of anygoods or for the provisions of any services, adopts any unfairmethod or unfair or deceptive practice including any of thefollowing practices, namely :(1) the practice of making any statement, whether orally or inwriting or by visible representation which, -

XXX (x) gives false or misleading facts disparaging the goods,services or trade of anotherperson. The changing context of liberalisation and globalisation required betterregulation and strengthening institutional support. The reverse seems to havehappened in India. Even the limited protection available through the MRTPAct has gone away. The MRTP Act regulated monopolies, and restrictive tradepractices and unfair trade practices. The Government of India constituted aCommission to recommend legislative measures for protecting and enhancingcompetition in the economy. Following the recommendationsof

theCompetition Commission, the government has repealed the MRTP Act.Instead, a Competition Act has been enacted to regulate monopolies and anticompetitiveor restrictive trade practices. This is to be done by creatingCompetition Councils in different regions of India. The CompetitionCommission was of the view that the Competition Act should not be burdenedwith unfair trade practices.28 This was instead, to be given effect under theConsumer Protection Act, 1986.