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Unfair Trade Practices - Case Study

The Trade Descriptions Ordinance (Chapter 362 of the Laws of Hong Kong) (“TDO”), as amended by the Trade Descriptions (Unfair Trade Practices) (Amendment) Ordinance 2012, prohibits common unfair trade practices deployed against consumers, including:

• false trade descriptions;
• misleading ommissions;
• aggressive commercial practices;
• bait advertising;
• bait-and-switch; and
• wrongly accepting payment

The maximum penalty upon conviction of the above offences is a fine of HK$500,000 and imprisonment for 5 years. The Customs and Excise Department (“C&ED”) is the principal enforcement agency of the TDO. 

As an alternative to pursuing prosecution, the TDO provides for a civil compliance-based mechanism under which C&ED may, with the consent of the Secretary for Justice, accept an undertaking from a trader believed to have engaged, be engaging, or be likely to engage in conduct that constitutes any of the above offences. This undertaking is a commitment by the trader not to continue or repeat the conduct concerned, providing a means to encourage compliance and resolve infringements expeditiously.

In the case KCCC 1279 of 2014, a beauty parlor solicited consumers to purchase prepaid service plans without telling them that all existing clients and equipment would be taken over by another operator. Although the level and quality of service provided might not be affected in any way, such a piece of material information was essential for an average consumer to make informed transactional decisions. A director of the beauty parlor was convicted for engaging in commercial practice that was a misleading omission and was fined HK$4,000. 

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Unfair Trade Practice: Definition, Deceptive Methods and Examples

Investopedia / Julie Bang

What Is an Unfair Trade Practice?

Unfair trade practices refer to the use of various deceptive, fraudulent, or unethical methods to obtain business. Unfair business practices include misrepresentation , false advertising or representation of a good or service, tied selling , false free prize or gift offers, deceptive pricing, and noncompliance with manufacturing standards. Such acts are considered unlawful by statute through the Consumer Protection Law , which opens up recourse for consumers by way of compensatory or punitive damages. An unfair trade practice is sometimes referred to as “deceptive trade practices” or “unfair business practices.”

Key Takeaways

• Unfair trade practices refer to businesses using deceptive, fraudulent, or otherwise unethical methods to gain an advantage or turn a profit.
• Consumer Protection Law, as well as Section 5(a) of the Federal Trade Commission Act, protects consumers from unfair business practices.

Understanding Unfair Trade Practices

Unfair trade practices are commonly seen in the purchase of goods and services by consumers, tenancy, insurance claims and settlements, and debt collection. Most states’ unfair trade practices statutes were originally enacted between the 1960s and 1970s. Since then, many states have adopted these laws to prevent unfair trade practices. Consumers who have been victimized should examine the unfair trade practice statute in their state to determine whether they have a cause of action.

Unfair trade practices are commonly seen in the purchase of goods and services by consumers, tenancy, insurance claims and settlements, and debt collection.

In the United States, unfair trade practices are addressed in Section 5(a) of the Federal Trade Commission Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce.” It applies to all individuals engaged in commerce, including banks, and sets the legal standard for unfair trade practices, which may be deemed unfair, deceptive, or both. Below are lists of unfair and deceptive practices as per the rule:

Unfair Practices

An act is unfair when it meets the following criteria:

• It causes or is likely to cause substantial injury to consumers.
• It cannot be reasonably avoided by consumers.
• It is not outweighed by countervailing benefits to consumers or to the competition.

Deceptive Practices

An act or practice is deceptive when it meets the following criteria:

• A representation, omission, or practice misleads or is likely to mislead the consumer.
• A consumer’s interpretation of the representation, omission, or practice is considered reasonable under the circumstances.
• The misleading representation, omission, or practice is material.

Examples of Unfair Trade Practices in Insurance

Unfair trade practices can happen in any industry but are significant enough to prompt the National Association of Insurance Commissioners (NAIC) to issue guidance related to the sale of insurance products . The NAIC defines unfair trade practices in the following ways:

• It misrepresents the benefits, advantages, conditions, or terms of any policy.
• It misrepresents the dividends or share of the surplus to be received on any policy.
• It makes a false or misleading statement as to the dividends or share of surplus previously paid on any policy.
• It is misleading or is a misrepresentation as to the financial condition of any insurer, or as to the legal reserve system upon which any life insurer operates.
• It uses any name or title of any policy or class of policies misrepresenting the true nature thereof.
• It is a misrepresentation, including any intentional misquote of the premium rate, for the purpose of inducing or tending to induce the purchase, lapse, forfeiture, exchange, conversion, or surrender of any policy.
• It is a misrepresentation for the purpose of effecting a pledge or assignment of or effecting a loan against any policy.
• It misrepresents any policy as being shares of stock.

The NAIC considers a deceptive trade practice to be any of the above acts coupled with the conditions below:

• It is committed flagrantly and in conscious disregard of the act or of any rules promulgated hereunder.
• It has been committed with such frequency to indicate a general business practice to engage in that type of conduct.

U.S. Department of Justice. " Consumer Actions Against Unfair or Deceptive Acts or Practices The Private Uses of Federal Trade Commission Jurisprudence ."

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Unfair Trade Practices in India: A Comparative Analysis Between the Competition and Consumer Laws

11 Pages Posted: 22 Jul 2020

Yash Agrawal

Galgotias University

Date Written: June 4, 2020

The term Unfair Trade Practice (UTPs) broadly refers to 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 which is prohibited by a statute or has been recognised as actionable under law or by a judgement of the court. This research paper deals with the reason behind the incorporation of the concept of unfair trade practices to Consumer Laws rather making it a part of Competition Laws. Further the paper analyses the concept of unfair trade practices in India by comparing the provisions of Competition and Consumer Laws made for the concern. This research paper aims to highlight the position of UTPs in India and analyses the interface between competition law and consumer law in the theoretical framework and through the non-uniform understanding of ‘consumer welfare’ with respect to unfair trade practices that is interpreted in both the legislation. Further this paper in detail will be dealing with, in various headings, the evolution of UTPs in MRTP, Consumer and Competition Act, the abolition of the MRTP Act, various steps taken under the Sachar Committee and the Raghavan Committee, the establishment of Competition Commission of India (CCI) and Competition Act, 2002, the position of UTPs in Consumer and Competition laws, the reason of incorporation of UTPs in Consumer Laws, the various components of UTPs and the authorities and agencies dealing with UTPs.

Keywords: Unfair Trade Practices (UTPs), Incorporation of UTPs, Consumer Welfare, Overlapping Provisions.

Suggested Citation: Suggested Citation

Yash Agrawal (Contact Author)

Galgotias university ( email ).

Plot No.2, Sector 17-A Yamuna Expressway Greater Noida, Uttar Pradesh 201306 India

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12.1 Unfair Trade Practices

The term “unfair trade practice” describes the use of deceptive, fraudulent, or unethical methods to gain business advantage or to cause injury to a consumer. Unfair trade practices are considered unlawful under the Consumer Protection Act. The purpose of the law is to ensure that consumers have the opportunity to make informed, rational decisions about the goods and services they purchase.

Unfair trade practices include false representation of a good or service, targeting vulnerable populations, false advertising, tied selling, false free prize or gift offers, false or deceptive pricing, and non-compliance with manufacturing standards. Alternative names for unfair trade practices are “deceptive trade practices” or “unfair business practices.”

Section 5(a) of the Federal Trade Commission Act prohibits “unfair or deceptive acts or practices in or affecting commerce.” Per the rule, unfair practices are those that cause, or are likely to cause, injury to consumers, those that consumers cannot avoid, and those in which the benefits of the product or service do not outweigh the deception. Deceptive practices are defined as those in which the seller misrepresents or misleads the consumer, and the misleading practice is substantial.

The Federal Trade Commission (FTC) is a federal agency that enforces consumer protection laws. Consumers may seek recourse for unfair trade practices by suing for compensatory or punitive damages. Plaintiffs do not have to prove intent. Showing that the practice itself was unfair or deceptive is sufficient.

Unfair Trade Practices and Examples

Product guarantees and false endorsements.

Companies must be prepared to honor product guarantees. For example, if a product is advertised with a 50 percent money-back guarantee, then that must be provided to customers who meet the requirement(s) attached to the guarantee. Similarly, companies may not create false endorsements and testimonials about their products.

Unfair Advertising

False advertising includes the misrepresentation of a product, service, or price. It may be more expansively defined to include unfair sales strategies, such as advertising one item and then selling another item in its place, e.g., one that is higher priced, lower quality and/or less in demand. This method is most commonly referred to as “bait and switch.” Additional examples of unfair advertising include incorrect pricing, fake endorsements, deceptive guarantees, making false statements, and providing descriptions that exaggerate the performance of the product or service.

For months, Ivan had searched for just the right window curtain to match the décor of his new high rise condo. Finally, while browsing through Amazon, he saw two gray velvet curtains that featured a damask pattern, with taupe and gold accents and specks of ice blue glitter accents. He could not have designed a more perfect color palette for the window treatments if he tried. Moreover, the velvet blackout touch was just what he needed. Excited, he hit the “Buy Now” button and waited a couple of days for his order to arrive. When it did, what a huge disappointment! He could see, if he stared long and hard enough, how someone with a vivid imagination might consider the curtain to be an abstract interpretation of what was advertised. However, most people would see that the product was not at all close to what was advertised. The velvet was closer to linen, the damask pattern was closer to swirls, and the taupe and gold accents with specks of ice blue were closer to silver and purple, with specks of mauve. After running a Google reverse image search of the original product photo, he saw it featured in an interior design magazine. When Ivan looked up the product endorsements and reviews, he saw that all of the reviewers had only posted reviews for that particular seller’s products, and that they had posted nothing but glowing reviews for each of the products. It was clear to Ivan that the seller was guilty of false advertising, as well as faking endorsements. Ivan has enough information to submit a consumer complaint to the Federal Trade Commission.

Taking Advantage of Customers

The FTC also pays particular attention to business ventures that target vulnerable populations. For example, some telemarketing efforts employ intense pressuring tactics to target seniors and people who don’t speak English.

Devin is involved in the telemarketing of spy gadgets, such as bugs and bug detectors. He has had a lot of trouble finding a market for these products. One day, he speaks with an older citizen who asks him about the benefits of the bug detector. Devin starts to knowingly make unsubstantiated claims that there have been news reports that home bugging is on the rise. His false claims works like a charm. Spooked, the elderly customer buys the most expensive bug detector product. Seeing his success, Devin purchases a report of households in his geographic selling area that are headed by people over the age of 70. Over the next few months, his sales increase at an explosive rate. When he is recognized by management for his leading sales numbers, they also inquire about the secret to his success as they seek to replicate it in training materials for other sales professionals. When Devin proudly explains his tactics, he is terminated by the company. The company calls the customers impacted by his false claims, explains that there was a misrepresentation by one their sales associates regarding the scope of known bugging activity, allows them to keep their bug detectors, and refunds them the money they spent purchasing the products. The sales associate engaged in unfair trade practices, but the company took appropriate steps to correct it.

Misrepresenting a Product

At times, the FTC may be quite technical in its definition of certain terms. For this reason, companies should be very clear about their usage of various phrases and words. For example, the word “new” may only be used to refer to a product that is less than six months old. Other terms may be the subject of debate or litigation, such as whether a lotion will actually “rejuvenate” skin or whether a tablet will actually “cure” baldness. Indeed, a sweater should not be called “wool” unless that is its complete composition. There are many examples, so it is important for businesses to have an understanding of the FTC’s rules on this topic.

Giving Misleading Price Information

The FTC sanctions misleading price information as an unfair trade practice. Examples of misleading price information include false sales in which a “limited time offer” might actually be available forever, or running a “Going Out of Business” sale without any plans to go out of business while advertising that items are discounted, although the prices have not changed.

A brick and mortar store has an online promotion for a “buy one, get one” offer for the season’s hottest new phone, stating that the offer is only available on Black Friday. The store opens at 5:00 a.m., and customers start lining up with their sleeping bags in tow the evening prior to the morning opening time. After customers almost stampede one another, they learn that they will have to also purchase a phone plan that is inflated by 100% of its regular price to qualify for the deal. Nowhere in the literature or promotions was the phone plan, or its over-inflated price, mentioned as a requirement to get the buy one get one free phone deal.

Failing to Disclose Pertinent Information

Merchants must disclose facts that would reasonably influence the consumer’s decision to make a purchase. Withholding pertinent information from customers may be viewed by the FTC as equal in severity to the process of using overtly incorrect or deceptive information. For example, sellers should always disclose the full price of their products or services before accepting payment for them.

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...amendment) read as under: (4) Subject to the provisions of sub-section (3), all cases pertaining to unfair trade practices other than those referred to in...Consumer Disputes Redressal Commission. Section 66 of the Act was amended in the following terms: 'Provided further that all the cases relating to the unfair trade ...- "Provided that all investigations or proceedings relating to unfair trade practices pending before the National Commission, on or before the date on which the C...

...the Tribunal, as the case may be, in such manner as may be prescribed.(3) All cases pertaining to monopolistic trade practices or restrictive trade practices pending (including such ...of the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969) as it stood before its repeal;(4) Subject to the provisions of sub-section (3), all cases pertaining to...Act.Provided further that all the cases relating to the unfair trade practices pending, before the National Commission under this sub-section, on or before the date on which the...

...under section 12B of the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969) as it stood before its repeal.]……………………..... Trade Practices Act, 1969 (54 of 1969) as it stood before its repeal.]…………………..[(5) All cases pertaining to unfair trade practices referred to in... unfair trade practices . Relying upon the judgement of the Supreme Court in Saurabh Prakash v. Dlf Universal Ltd.., (2007) 1 SCC 228 the...

...Heard the complainant who appears in person. This petition has been filed alleging that the respondent (Ghaziabad Development Authority) has indulged in monopolistic/ unfair trade practices . The basic allegatio...-petitioner No. 27.In view of the background facts of the case, it cannot be said that there was any monopolistic or unfair trade practices involved. The proceedings are therefore closed...respective cases , the decision was taken to refund the amount. The case of the complainant, according to the respondent, is of a different nature. The facts of the case clearly disclose that so far as the...

...enforced, and any such penalty, confiscation or punishment may be imposed or made as if that Act had not been repealed.](3) All cases pertaining to monopolistic trade practices or restrictive ...section 12B of the Monopolies and Restrictive Trade Practices Act, 1969 (54 of 1969) as it stood before its repeal](4) Subject to ... cases relating to the unfair trade practices pending, before the National Commission under this subsection, on or before the date on which the competition (Amendment) Bill, 2009 receives the assent...

...and the cases of restrictive and unfair trade practices pending before the erstwhile Commission stood transferred to this Tribunal, which was established under Section 53A of the 2002 Act and the...), second proviso was inserted to Section 66(4) of the 2002 Act for deemed transfer of the cases of unfair trade practices from the National Consumer Disputes Redressal Commission...respectfully prayed that(i) This Hon'ble Commission may be pleased to inquire into the unfair and restrictive trade practices indulged into by the Respondents in relation to the backing out...

...one of the many hundred other similar cases , where the Forum has found OP guilty of deficiency and unfair trade practices and cheating with consumers. The facts in this case clearly show that OP has...return Rs.7,91,786/- deposited with OP, with interest of 12% from the respective date of deposits and we award Rs.1 lakh as compensation for unfair trade practice adopted by OP and Rs.25,000/- for...

...and such labour practices on the part of the employers or the trade unions of employees, as mentioned in Schedules II, III and IV, could be prevented in appropriate cases by the courts concerned...employers, the trade unions of the employers and on the part of the workmen and trade unions of workmen, which are almost in pari materia with lists of unfair labour practices on the part of the employers, on...the part of the trade unions and general unfair labour practices on the part of the employers as found in Schedules II, III and IV of the Maharashtra Act. However, even the aforesaid amended...

...losses on account of unfair trade practices adopted by the respondent, hence he sought compensation from the respondent by filing an application under Section 12-B of the Monopolies and Restrictive...case of deficiency of services on the part of the respondent. As a result of such unfair trade practices , the applicant has not only been deprived of return on his investment made with the respondent... Trade Practices Act, 1969 (hereinafter referred to as “the Act”).4. In response to the notice issued under Section 12-B of the Act, the respondent filed its reply. The...

...of monopolistic, restrictive and unfair trade practices committed by any trader, undertaking or corporations. It was also felt by the Committee that such a power and its exercise by the Commission in appropriate ...limitation prescribed for a suit under the Limitation Act prior to the insertion of section 12B.2. Section 12B shall, however, have prospective operation in the case of unfair trade practices and shall, the...Act. We have already recommended that a separate chapter be included to deal with unfair trade practices like false representations and misleading advertisements. It is a well established principle of...

...National Consumer Disputes Redressal Commission. By an amendment made in 2009 vide Act 39 of 2009, second proviso was inserted in Section 66(4) for deemed transfer of the cases of unfair trade practices ...1. In this complaint filed under Section 36-A read with Section 36-B(a) and 36-D of the Monopolies and Restrictive Trade Practices Act, 1969 (for short, the ‘1969 Act’), which came to...:—a. Order an inquiry under Section 36-A read with Section 36-B (a) and 36-D of the Act and hold that the refusal to compensate the informant by the Respondent amounts to unfair trade ...

...degree of proof required to hold brokers/sub-brokers liable for fraudulent/manipulative practices under the Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices ... practices and Section 15-J which lay down the factors to be taken into account while adjudging the quantum of penalty read as follows:“15-HA. Penalty for fraudulent and unfair trade ... practices .—If any person indulges in fraudulent and unfair trade practices relating to securities he shall be liable to a penalty of twenty-five crore rupees or three times the amount of profits made...

...Act. The learned counsel further points out that under Section 66(3) of the Act, all cases pertaining to monopolistic trade practices or restrictive trade practices pending before the Monopolies and Restri...its prayer, the complainant has prayed for ordering inquiry into unfair trade practices for not delivering the collaterals even after providing no dues certificate and having no charge thereby adopting...initiating enquiry into the unfair trade practices and the residuary prayer was for passing such orders as may be deem fit. During the pendency of this complaint, a Compensation Application under...

...enforced in 2009, the 1969 Act was repealed and the cases of restrictive and unfair trade practices pending before the erstwhile Commission stood transferred to this Tribunal, which was established...Amendment Act, 2009 (Act 39 of 2009), second proviso was inserted toSection 66(4) of the 2002 Act for deemed transfer of the cases of unfair trade practices from the...most respectfully prayed that (i) This Honble Commission may be pleased to inquire into the unfair and restrictive trade practices indulged into by the Respondents in relation to...

...the Commission framed the following issues for its consideration:1. Whether the respondent is or has been indulging in unfair trade practices as alleged in the compensation...application?2. Whether the applicant has suffered any loss or injury as a result of unfair trade practices and if so, the amount of compensation to which he may be...prohibited trade practices . The Commission observed: “ Unfair trade practices on the part of the respondent are manifest and need no further reiteration.” The Commission, however, referred to the...

...proceedings filed before the commencement of this Act.3. Sub-section (3) of section 66 of the Act, inter alia, provides that all cases pertaining to monopolistic trade practices or restrictive ...all cases pertaining to unfair trade practices other than those referred to in clause (x) of sub-section (1) of section 36A of the MRTP Act before the MRTPC shall, on or...machinery with them, certain further amendments are proposed to section 66 of the Act which, inter alia, contains that—(i) all the cases relating to unfair trade practices pending before...

... Practices Act,1969 came to be repealed and the Monopolies and Restrictive Trade Practices Commission established under Section 5(1) of the said Act stood dissolved as it is seen from ...,1969 and pending before the Monopolies and Restrictive Trade Practices Commission on or before the commencement of Competition Act,2002, shall be transferred to the National Commission constituted under the Consumer Protection ...respect of other provisions. 9. Under the erstwhile Monopolies and Restrictive Trade Practices Act,1969, unfair trade practice was defined to mean "in...

...). The complainant alleges that the first opposite party engaged in restrictive or unfair trade practices by selling defective goods. This allegation falls within the purview of Secti...(1)(c) of the Consumer Protection Act, 1986, pertaining to allegations of restrictive or unfair trade practices and the sale of defective or hazardous goods to the public...) Whether there is any deficiency in service or unfair trade practice from the side of the opposite party to the complainant? iii) If so, whether the complainant is...

...this Hon'ble Forum be pleased to hold that the opposite parties (jointly and severally) have practised unfair trade practice towards the complainant and direct them (jointly and severally) to remove... unfair trade practice, practiced by them against the complainant;(b) This Hon'ble Forum be pleased to direct the opposite parties (jointly and severally) to...was thus, “ unfair trade practice”. He sought permission to remove “ unfair trade practice” and deficiencies in service and also to refund a sum of Rs 14 lakhs, the price of the vehicle and Rs 1,91,295...

...made by us in this order should be construed as expression of any final opinion on the issues that may arise for consideration in the main enquiries, namely, Unfair Trade Practices and Restrictive Trade ...any services or being indulged in the unfair trade practices or restrictive trade practice is also denied by them. According to them, neither there is any proper agreement executed between the parties...repelled and it was urged that the instant cause is an enquiry relating to unfair trade practices indulged in by the respondent and the jurisdiction of the Commission is in addition to the existing remedies...

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Regulating Unfair Trade Practices: an Analysis of the Past and Present Indian Legislative Models

• Published: 12 November 2015
• Volume 39 , pages 91–109, ( 2016 )

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• Raman Mittal   ORCID: orcid.org/0000-0002-2663-1017 1 ,
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The Monopolies and Restrictive Trade Practices Act, 1969 (MRTP Act) which for the first time incorporated detailed provisions as to unfair trade practices (UTPs) in India has now been repealed and succeeded by the Consumer Protection Act, 1986 which has included the same substantive definition of UTPs. This article analyses the law as to UTPs under the repealed MRTP Act including the cases decided thereunder and compares it with the structure of the Consumer Protection Act with the objective of evaluating whether the present Consumer Dispute Redressal Agencies under the Consumer Protection Act have adequate substantive provisions and effective procedural competence to ward off UTPs. Our analysis of legislative provisions and decided cases shows that the present system of protection against UTPs under the Consumer Protection Act is blighted by a strict and restrictive definition of consumer ; lack of in-house enquiry and investigation system, incompetency of traders and trade associations to pursue cases, and lack of inherent power of the Consumer Dispute Redressal Agencies to suo motu take up matters. The article uses analytical and statistical methods to quantify, in terms of actual effect, these drawbacks which significantly hamper the present system and suggests various means to improve the functioning of the system so as to effectively deal with UTPs.

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The MRTP Act, 1969 has already been repealed in 2009, and the MRTP Commission wound up. Even during its presence, there was no journal that specifically reported the cases decided by the MRTP Commission although various journals carried these cases according to their subject matter. Since the UTP provisions were added in the MRTP Act in 1984, we looked for decided cases from 1984 to its winding up, i.e., 2009. We searched all the available online and print journals for all such decided cases and found as many as 719 cases decided by the MRTP Commission and 26 cases decided by the Supreme Court of India on UTPs. These cases comprise the database of cases on the basis of which we have attempted our analysis and have drawn conclusions.

Consumers’ organizations are typically private associations which act as representatives of the broader consumer or public interest in fair competition and fair commercial practices. These organizations do receive funding from the government in many countries.

Sachar Committee report (1978); see para. 21.12.

Sachar Committee report (1978); see para. 21.18.

Sachar Committee report (1978); see para. 21.14.

When the Consumer Protection Act was enacted in 1986, it did not originally contain the definition of unfair trade practice . The concept of unfair trade practice was, however, interpreted according to the definition of unfair trade practice, given in the MRTP Act of 1969. However, in 1993, Section 2(1)(r) incorporated an exhaustive definition of unfair trade practice as given under Section 36A of the MRTP Act with a view to making the Consumer Protection Act, 1986 a self-contained Code. See Law Commission of India 199th report on unfair (procedural and substantive) terms in contract, August 2006 at pages 37–39.

MRTP (Amendment) Act, 1984. The definition was subject to further amendment in the year 1991 by way of the MRTP (Amendment) Act, 1991.

Section 36A, MRTP Act, 1969. Emphasis added.

As originally framed in 1984, this definition envisaged that a trade practice should fall within the ambit of one or more of the categories of unfair trade practice as enumerated under clauses 1–5 of Section 36A of the MRTP Act. However, this definition was amended in its present form by the MRTP (Amendment) Act, 1991.

In Maruti Suzuki India Ltd. versus Rajiv Kumar , 2009 (7) CP SC 1047: JT 2009 (9) SC 406, it was held by the Supreme Court of India that the definition of unfair trade practice under Section 36A is an inclusive one and not exhaustive. See also Philips Medical Systems (Cleveland) Inc. versus Indian MRI Diagnostic and Research Ltd. and Anr. , AIR 2009 SC 1052.

Section 2(s), MRTP Act, 1969.

Section 2(u), MRTP Act, 1969.

KLM Royal Dutch Airlines versus Director General of Investigation and Registration , AIR 2009 SC 938.

Supra note 1.

The total number of cases decided by the MRTP Commission that we have included in our database and that have been analysed is 719; however, there is an increase in the total number of cases in some categories of our analysis because of the presence of one or more elements which has necessitated in repeat counting of a particular case. For example, when we are looking at the breakup of total number of cases where different reliefs have been granted by the Commission, we have to add up all the cases in which relief has been granted. In some cases, multiple reliefs have been granted by the Commission, so the figure of total cases is bound to exceed 719. This method of statistical analysis will have minimal effect on the calculated percentages and will be a more accurate portrayal of the data.

One is about gift schemes and the other about manufacture of spurious goods.

In re Kinetic Honda Motors Ltd. (1994) 15 CLA (Snr.) 6 (MRTPC).

M.K. Awtaney versus Mahanagar Telephone Nigam Limited , I (2003) CPJ 85 (MRTP).

Section 12, Consumer Protection Act, 1986. Emphasis added.

Section 5(1), MRTP Act, 1969.

Section 55, MRTP Act, 1969: “Any person aggrieved by any decision on any question referred to in clause (a), clause (b) or clause (c) of section 2A, or any order made by the Central Government under Chapter III or Chapter IV, or, as the case may be, or the Commission under section 12A or section 13 or section 36D or section 37, may, within sixty days from the date of the order, prefer an appeal to the Supreme Court on one or more of the grounds specified in section 100 of the Code of Civil Procedure, 1908 (5 of 1908).”

Section 9, Consumer Protection Act, 1986.

Section 24, Consumer Protection Act, 1986.

Section 11, MRTP Act, 1969 stated: (1) The Commission may, before issuing any process requiring the attendance of the person against whom an inquiry (other than an inquiry upon an application by the Director General) may be made under Section 10, by an order, require the Director General to make, or cause to be made, a preliminary investigation in such manner as it may direct and submit a report to the Commission to enable it to satisfy itself as to whether or not the matter requires to be inquired into. (2) The Director General may, upon his own knowledge or information or on a complaint made to him, make, or cause to be made, a preliminary investigation in such manner as he may think fit to enable him to satisfy himself as to whether or not an application should be made by him to the Commission under Section 10.

Section 2(t), MRTP Act, 1969: Trade association means a body of persons (whether incorporated or not) which is formed for the purpose of furthering the trade interests of its members or of persons represented by its members.

Section 2(n), MRTP Act, 1969: Registered consumers’ association means a voluntary association of persons registered under the Companies Act, 1956 (1 of 1956) or any other law for the time being in force which is formed for the purpose of protecting the interests of consumers generally and is recognized by the Central Government as such association on an application made in this behalf in such form and such manner as may be prescribed.

Paras Steel Emporium versus Hawkins Cookers Limited , 2001 INDLAW MRTPC 4.

S. Durga Prasad Rao versus Bata Shoes Store and Anr , 1999 INDLAW MRTPC 59.

DG (I & R) versus Smt Shanta Kumari (1987) 62 Comp Cas157.

See supra note 15.

See Section 2(d), Consumer Protection Act, 1986.

Section 2(d) (explanation), Consumer Protection Act, 1986: For the purposes of sub-clause (i), commercial purpose does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment.

See Section 36B, MRTP Act, 1969.

See Section 12A, MRTP Act, 1969.

See the opening part of Section 36D(1): “The Commission may inquire into any unfair trade practice which may come before it for inquiry and, if after such inquiry, it is of opinion that the practice is prejudicial to ‘the public interest, or to the interest of any consumer or consumers generally,’ it may, by order direct that….” Emphasis added.

Section 12B(1), MRTP Act, 1969: “Where, as a result of the monopolistic or restrictive, or unfair trade practice, carried on by any undertaking or any person, any loss or damage is caused to the Central Government, or any State Government or ‘any trader or class of traders’ or any consumer, such Government or, as the case may be, trader or class of traders or consumer may, without prejudice to the right of such Government, trader or class of traders or consumer to institute a suit for the recovery of any compensation for the loss or damage so caused, make an application to the Commission for an order for the recovery from that undertaking or owner thereof or, as the case may be, from such person, of such amount as the Commission may determine as compensation for the loss or damage so caused.” Emphasis added.

See Section 36D, MRTP Act, 1969.

DG (I & R) versus Asian Townville Farms Ltd . (1986) 60 Comp Cas 1008.

Federation of Parenteral Manufactures of India and Another versus Core Parenterals Ltd. and Another (1994) 14 CLA 387 (MRTPC)

DG (I & R) versus R.M.P. of India , MANU/MR/0009/1988.

Section 24A, Consumer Protection Act, 1986.

See Rule 14(4), Consumer Protection Rules, 1987.

DG (I & R) versus Mrs. Kamlesh Thaper (1988) 64 Comp Cas 109.

DG (I & R) versus Thermax Private Limited , I (2003) CPJ 158 (MRTP).

This figure has been calculated by including the cases where interim injunction was granted during the pendency of the inquiry.

See, for example, Sections 5–8 of the Consumer Affairs (Unfair Business Practices) Act, 1988 of South Africa; Section 45 of the Federal Trade Commission Act, 1914 of USA; and Sections 21–22 of the Consumer Protection Law, 5741 of 1981 of Israel.

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Acknowledgments

This article is a part of a larger study done by the authors under a project granted by the Gesellschaft für Internationale Zusammenarbeit (GIZ), India, and the Ministry of Consumer Affairs, Government of India.

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Mittal, R., Sonkar, S. & Kaur, P. Regulating Unfair Trade Practices: an Analysis of the Past and Present Indian Legislative Models. J Consum Policy 39 , 91–109 (2016). https://doi.org/10.1007/s10603-015-9302-8

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Received : 02 November 2014

Accepted : 17 September 2015

Published : 12 November 2015

Issue Date : March 2016

DOI : https://doi.org/10.1007/s10603-015-9302-8

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You are here » Home » Our Work » EU Policies » Directive on Unfair Trading Practices

Directive on Unfair Trading Practices

Present day supply chains are characterised by massive concentrations of (buying) power on the level of retailers and large traders. This leads to the diminishment of bargaining power for the small suppliers, and subsequently to the ability of supermarkets and large traders to effectively dictate the terms of business. Producers and other suppliers are often left with a painful choice: to sell on poor and unpredictable terms, or not to sell at all. Although they may not be able to make a profit or may face long hours working in unsafe conditions, there are few alternative ways to earn a living for communities with no safety net to fall back on in hard times.

Those marginalised and powerless at the end of the supply chain hence suffer most from unequal power in supply chains – and this is why the Fair Trade movement and allies are taking action. After years of advocacy and campaigning by farmer and civil society organisations, the European Union adopted a piece of legislation to provide a minimum level of protection against Unfair Trading Practices in food supply chains (Unfair Trading Practices Directive) in February 2019.

WHAT ARE OUR VIEWS?

We welcome the recent adoption of the EU’s Directive on Unfair Trading Practices in the Agricultural and Food Supply Chain . It is now essential that the EU Member States implement (transpose) this new EU minimum level of protection into their national legislation.

In this framework, Traidcraft Exchange, IFOAM-EU, Oxfam, SOMO and FTAO have put together a “ Transposition and Implementation Guide ” to explain key features of the Directive and give guidance on how to ensure that the transposition process results in a piece of legislation at national level that improves the minimum standard laid down by the Directive.

The guide is for the use of civil society organisations, businesses and members of the public based in EU Member States that are working for greater fairness in agricultural supply chains. It includes:

• An introduction to the Unfair Trading Practices Directive • Guidance on monitoring the transposition and implementation of the Directive to ensure maximum effectiveness • Guidance for where national law can improve on the minimum standards of the Directive • Suggestions for how to engage with the legislative process at Member State-level • How to use the Directive to stop unfair trading practices • Other relevant policy areas to be aware of

(Note: If you are interested in translating this guide into another language, contact [email protected] for the source file.)

• Webinar – How to be protected against Unfair Trading Practices when you export to the EU?  (17 November 2021)

FURTHER READING

Who’s Got the Power? – Tackling Imbalances in Agricultural Supply Chains (Executive Summary)  (FTAO) Who’s got the power? – Tackling Imbalances in Agricultural Supply Chains (FTAO) Ripe for change – Ending Human Suffering in Supermarket Supply Chains (Oxfam) Food Waste in Kenya – Uncovering Food Waste in the Horticultural Export Supply Chain (Feedback)

Case Studies

Banana Value Chains in Europe and the Consequences of Unfair Trading Practices (Le Basic) Cashew Case Study (Traidcraft) Mango Case Study (Oxfam Deutschland) The Story Behind the Pineapples Sold on our Supermarket Shelves: A Case Study of Costa Rica, 2010 (Consumers International and Banana Link) Green Beans Case Study (SOMO) Orange Case Study (CIR)

Blog Post – ‘What is the EU’s new Unfair Trading Practices Directive?’ (Tom Wills, Traidcraft Exchange) Legal Research – ‘How to Set Up a Coordinated Effective ‘Enforce Mechanism to Stop UTPs in EU’ (British Institute of International and Comparative Law)