Monopolies and Restrictive Trade

Practices (Control & Prevention)

Ordinance MRTPO
Razi Ahsan
Advocate High Court & Tax Consultant

Diploma “Business Laws & Taxation”

CCEE - NED University Of Engineering & Technology
2021
Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO

This Ordinance may be called the Monopolies and Restrictive Trade Practices (Control and Prevention) Ordinance,
1970. (2) It extends to the whole of Pakistan . (3) It shall come into force on such date as the [Federal Government]
may, by notification in the official Gazette
The following Ordinance made by the President on the 21st February, 1970, is hereby published for general
information:---

 Whereas the undue concentration of economic power, growth of unreasonable monopoly power and
unreasonable restrictive trade practices are injurious to the economic well-being, growth and development
of Pakistan:---
 And whereas it is expedient to provide for measures against such concentration, growth and practices and for
matters connected therewith or incidental thereto;
 And whereas the national interest of Pakistan in relation to the economic and financial stability
of Pakistan requires [Federal] legislation in the matter;
 Now, therefore, in pursuance of the Proclamation of the 25th day of March, 1969, read with the Provisional
Constitution Order, and in exercise of all powers enabling him in that behalf, the President is pleased to make and
promulgate the following Ordinance
Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO

 CHAPTER II - UNDUE CONCENTRATION OF ECONOMIC POWER, ETC. PROHIBITED

 CHAPTER III - MONOPOLY CONTROL AUTHORITY

 CHAPTER IV - FUNCTIONS AND POWERS OF THE AUTHORITY

 CHAPTER V - REGISTRATION

 CHAPTER VI - PENALTIES AND APPEALS

 The Monopoly Control Authority Rules, 1971
 The Monopoly Control Authority (Net Worth of Stocks and Shares) Rules, 1977
 The Monopoly Control Authority (Value of Assets) Rules, 1991
 Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO
The Competition Commission of Pakistan (CCP) is an independent quasi-regulatory, quasi-judicial body that helps ensure healthy
competition between companies for the benefit of the economy.
 The Commission prohibits abuse of a dominant position in the market, certain types of anti-competitive agreements, and deceptive market
practices. It also reviews mergers of undertakings that could result in a significant lessening of competition. Combined with its advocacy efforts,
the Commission seeks to promote voluntary compliance and develop a ‘competition culture’ in the economy.
 The Competition Commission of Pakistan (CCP) was established on 2 October 2007 under the Competition Ordinance, 2007, which was
repromulgated in November 2009. Major aim of this Ordinance was to provide for a legal framework to create a business environment based on
healthy competition for improving economic efficiency, developing competitiveness and protecting consumers from anti-competitive practices.
 Prior to the Competition Ordinance, 2007, Pakistan had an anti-monopoly law namely ‘Monopolies and Restrictive Trade Practices (Control and
Prevention) Ordinance’ (MRTPO) 1970. The Monopoly Control Authority (MCA) was the organization to administer this Law. In the fast changing
global and national economic environment, the MRTPO, 1970 was inadequate to address competition issues effectively. This was because:
 i) the 1970’s law was out of date for a modernizing and rapidly transforming market economy;
 ii) due to several limitations in the law, the MCA was not able to meet the expectations of businesses and the consumers at large;
 iii) the first generation reforms that liberalized the economy and encouraged the private sector required a competition policy framework that
could promote and protect competition and innovation.
 The Government of Pakistan thus launched a programme to develop Competition Policy as a key “second generation reform” initiative. Towards
this end, the Ministry of Finance and the MCA worked with the World Bank and the Department for International Development (DFID), UK. As a
result of these efforts, Competition Ordinance, 2007 replaced the MRTPO.After getting approve, Competition Ordinance 2007 finally transformed
into Competition Act 2010.
 The Competition Act, 2010 considers the current economic realities as well as corrects the deficiencies of the MRTPO related to definitional
aspects, coverage, penalties, and other procedural matters.
 In line with modern competition regimes, the law adopts a ‘carrot and stick” approach - the law provides for higher fines combined with
imprisonment for non-compliance; on the other hand, the carrot is sweetened with sophisticated leniency provisions that may eventually lead to
no fines and imprisonment, subject to certain conditions. To maintain high standard of evidence for unearthing secret cartels, the Competition
Commission has legal powers to conduct searches and inspections’.
 Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO
The Competition Act, 2010 (CA ’10) is a state of the art modern law which gives the Competition Commission of Pakistan legal and investigative
instruments and powers to engender free competition in all spheres of commercial and economic activity, enhance economic efficiency, and to
protect consumers from anticompetitive behaviour.
 The Act applies to all undertakings in Pakistan regardless of their public or private ownership and to all actions or matters that can affect
competition in Pakistan. Although essentially an enabling law, it briefly sets out procedures relating to review of mergers and acquisitions,
enquiries, imposition of penalties, grant of leniency and other essential aspects of law enforcement.
 Briefly, the law prohibits situations that tend to lessen, distort, or eliminate competition such as actions constituting an abuse of market
dominance, competition restricting agreements, and deceptive marketing practices.
 Abuse of Dominant Position. §3 of the Act prohibits the abuse of a dominant position through any practice that prevents, restricts, reduces, or
distorts competition in the relevant market. These practices include, but are not limited to, reducing production or sales, unreasonable price
increases, charging different prices to different customers without objective justifications, tieins that make the sale of goods or services
conditional on the purchase of other goods or services, predatory pricing, refusing to deal, and boycotting or excluding any other undertaking
from producing, distributing or selling goods, or providing any service.
 Prohibited Agreements. §4 of the Act prohibits undertakings or associations from entering into any agreement or making any decision in respect
of the production, supply, distribution, acquisition or control of goods or the provision of services, which have the object or effect of preventing,
restricting, reducing, or distorting competition within the relevant market. Such agreements include, but are not limited to, market sharing and
price fixing of any sort, fixing quantities for production, distribution or sale; limiting technical developments; as well as collusive tendering or
bidding and the application of dissimilar conditions. The Commission is authorised, however, to issue either individual or block exemptions under
§5-9 of the Act.
 Deceptive Marketing. The Act prohibits deceptive marketing practices, in other words, any advertising or promotional material that misrepresents
the nature, characteristics, qualities, or geographic origin of goods, services or commercial activities. An Office of Fair Trade (OFT) has been
created within CCP specifically to oversee consumer protection issues under §10 of the Act.
 Approval of Mergers. The law prohibits mergers that would substantially lessen competition by creating or strengthening a dominant position in
the relevant market. The Act requires prior notice of proposed mergers or acquisitions that meet the notification thresholds stipulated in §4 of the
Competition (Merger Control) Regulations 2007. If the Commission determines this to be the case, it can prevent mergers or acquisitions, set
conditions or require divestitures. The Act does not distinguish between horizontal and vertical mergers. The term merger in §11 also covers joint
ventures, therefore they are subject to the Commission’s approval provided that they meet the notification thresholds.
 Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO
Competition advocacy is about promotion of competition through means, other than law
enforcement. A competition authority – how it is perceived by the general public, by the business
community and by other government and regulatory bodies – has a significant importance on how
effectively it will be able to perform its duties.
 Like other developing countries Pakistan also faces the challenge to build competition culture. Being
well aware of this challenge, CCP is vigorously pursuing an advocacy agenda to inform, educate and
persuade its stakeholders on the need and implementation of competition law. CCP is giving full
attention to building a competition culture through aggressive public relations and dissemination of
information.
 The advocacy agenda of CCP is broad-based and focuses on education of a wide range of
stakeholders including the government, industry, media, undertakings and the civil society. All
available resources are being used to build a competition culture through advocacy. Few examples
of the advocacy activities taken up by CCP include media appearances/coverage ,Interviews , Press
Releases, seminars, advocacy meetings and media training workshops, roundtables, Competition
Consultative Group’s meetings and bilateral meetings with sector-specific regulators.
 Advocacy is an ongoing process and it takes a central position in the overall competition policy of
Pakistan. With limited resources at hand, CCP is trying to seek out programs that require little
spending and ensure widespread influence.
Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO

The Global Forum on Competition brings together every year

competition officials from over 110 authorities and
organisations worldwide.
The ICN's mission is to advocate the adoption of superior
standards and procedures in competition policy around the
world, formulate proposals for procedural and substantive
convergence, and seek to facilitate effective international
cooperation to the benefit of member agencies, consumers
and economies worldwide.
Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO

What is Monopolies and Restrictive Trade Practices: Act to

provide that the operation of the economic system does not
result in the concentration of economic power to the
common detriment, for the control of monopolies, for the
prohibition of monopolistic and restrictive trade
practices and for matters connected therewith or incidental
thereto.
Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO

What is Monopoly Control Authority:The Monopoly

Control Authority (MCA) was the organization to
administer this Law. In the fast changing global and
national economic environment, the MRTPO, 1970
was inadequate to address competition issues
effectively
Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO

What is the meaning of restrictive trade practices Restrictive trade

practice means a trade practice which tends to bring about
manipulation of price or conditions of delivery or to affect flow of
supplies in market relating to goods or services in such a manner as to
impose on the consumers unjustified costs or restrictions
Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO

What are examples of unfair trade practices Some examples

of unfair trade methods are: the false representation of a
good or service; false free gift or prize offers; non-
compliance with manufacturing standards; false advertising;
or deceptive pricing.
Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO

What are restrictive trade practices Examples of restrictive

practices include EXCLUSIVE DEALING, REFUSAL TO SUPPLY,
FULL LINE FORCING, TIE-IN SALES, AGGREGATED REBATES,
RESALE PRICE MAINTENANCE and LOSS LEADING.
Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO

Guide line How to prevent unfair practice

Avoid using unfair business practices against consumers

Avoid misleading your customers about price, quality and value.
Avoid making false claims about products or services
Avoid making false and misleading claims about Indigenous
souvenirs and artwork
Avoid using unfair business tactics.
Avoid Illegal selling methods.
 Avoid Fuel price reporting trial.
Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO

What are the main provisions of MRTP Act

The main administrative body under the Act is
the MRTP Commission. The MRTP Act lays
down provisions detailing the terms of office, conditions
of service of members, and the appointment of directors.
The Commission is a quasi-judicial body, and investigates
complaints into monopolistic and restrictive trade
practices.
Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO

MONOPOLIES AND RESTRICTIVE TRADE

PRACTICES ACT (MRTP) This Act was enacted
to prevent the concentration of economic power to
common detriment, control of monopolies, and
prohibition of monopolistic and restrictive trade practices
(MRTP) and matters connected therewith.
Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO

What happens when trade is unfair The unfair trade can

distort the normal course of business and adversely affect
farmers, businesses and workers and this is
why trade remedies play an important role in maintaining
the level playing field necessary for a properly functioning
global trading system
Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO

What is an unfair law Unfair business practices encompass

fraud, misrepresentation, and oppressive or
unconscionable acts or practices by business, often
against consumers, and are prohibited by law in many
countries.
Monopolies and Restrictive Trade Practices (Control & Prevention) Ordinance MRTPO

What are trade practices a method of competition,

operating policy (as the use of standards of size, shape,
and quality of materials), or business procedure common
to members of a line of business or industry that may be
formally adopted sometimes as a rule under government
auspices.
Thank You
.