Concept of Unfair Trade Practices under Consumer Protection Act, 2019

Coverage of this Article

Introduction:

-The term "Unfair Trade Practice" broadly refers to any dishonest, dishonourable, or deceptive trade behaviour, as well as commercial deception of goods or services that are continuously sold, that is prohibited by law or has been determined to be significant under the law by a court judgement. 

Meaning and Concept of Unfair trade practice:

-By contrasting the provisions of the Competition and Consumer Laws enacted in response to the issue, the article also analyses the idea of unfair business practises in India. In addition to analysing the theoretical foundation and the inconsistent interpretations of "consumer welfare" with regard to unfair trade practises that are included in both pieces of legislation, this research article intends to emphasise the situation of UTPs in India.

Unfair Trade Practices in Various Sectors:

-There has never been an end to the rivalry between suppliers of brand-name and generic drugs. These competitions would eventually turn negative and result in a number of instances of unfair business practises in the pharmaceutical industry. It is well known that the pharmaceutical industry has a significant impact on doctors' prescribing behaviours when they are in charge of the patient, who is the final user of the drug in question. Promotion and knowledge must be distinguished from one another. A medical representative may have precompetitive impacts while informing doctors about new medications and their benefits and efficacy.

Case Laws:

-The tobacco company's contested advertising was the target of the lawsuit. The product was oversubscribed under the name "red &White," along with the phrases "Red &White smokers are one of a kind."

Conclusion:

-Huge sellers frequently subject consumers to unethical commercial tactics, and consumers fall victim to their ruthless economic rivalry.

Introduction:

The term "Unfair Trade Practice" broadly refers to any dishonest, dishonourable, or deceptive trade behaviour, as well as commercial deception of goods or services that are continuously sold, that is prohibited by law or has been determined to be significant under the law by a court judgement. One common example of unfair commercial tactics is the illegitimate rejection of any form of group action, deceptive consumer solicitation, disruption of competitors' company operations, and competitor exclusion. Wherever there is fierce competition in the modern business and startup environment, entrepreneurs dare to utilise unethical trade tactics to gain the upper hand. They may gain from this in the short term, but in the long run, the organisation and ultimately the entire industry and society are affected. The products' lies might take many different forms. The sellers may also suffer unintended financial losses as a result of the unfair business activities, which can invite a variety of torts.

Meaning and Concept of Unfair trade practice:

The phrase unfair trade practises defined in Section 2(47) of the Consumer Protection Act, 2019. It says that-

1. Producing counterfeit goods or offering inferior services.

2. Failing to send invoices or cash memos for the products or services received.

3. Refusing to accept the goods or services back or withdraw them and failing to reimburse the payment made for them.

4. Disseminating the consumer's private information.

The term "unfair trade practise" (UTP) broadly refers to a trade practise that adopts any unfair method or unfair or deceptive practise that is prohibited by a statute or has been recognised as actionable under law or by a court judgement in order to promote the sale, use, supply of any goods or the provision of any service.

By contrasting the provisions of the Competition and Consumer Laws enacted in response to the issue, the article also analyses the idea of unfair business practises in India. In addition to analysing the theoretical foundation and the inconsistent interpretations of "consumer welfare" with regard to unfair trade practises that are included in both pieces of legislation, this research article intends to emphasise the situation of UTPs in India.

The evolution of UTPs in MRTP, Consumer and Competition Act, the repeal of the MRTP Act, various actions taken under the Sachar Committee and the Raghavan Committee, the establishment of the Competition Commission of India (CCI) and the Competition Act, 2002, the position of UTPs in Consumer and Competition laws, and the rationale behind their incorporation into Consumer Laws are all further topics that will be covered in detail in this article.

Unfair Trade Practices in Various Sectors:

Pharmaceutical Sector-

There has never been an end to the rivalry between suppliers of brand-name and generic drugs. These competitions would eventually turn negative and result in a number of instances of unfair business practises in the pharmaceutical industry. It is well known that the pharmaceutical industry has a significant impact on doctors' prescribing behaviours when they are in charge of the patient, who is the final user of the drug in question. Promotion and knowledge must be distinguished from one another. A medical representative may have precompetitive impacts while informing doctors about new medications and their benefits and efficacy.

Food Sector:

Concerns over the quality and quantity of food products, as well as unfair trade practises, have spread around the world. Almost everyone has heard of instances of chemicals being intentionally added, such as additives and adulterants, to products during production, processing, packing, and storage in order to conceal inferior goods, contaminate products or generate unauthorised profits. Such unethical and unfair business actions are extremely dangerous since they pose a serious hazard to consumers' health. In May, during a raid at a store of a mango dealer in Pune, Food and Drug Administration (FDA) authorities took 500 weight unit mangoes worth Rs. 25,000 that were being aged with the use of a chemical called calcium carbide. Under the restrictions of the Food Adulteration Act, the use of inorganic compounds to artificially ripen food is illegal.

Insurance Sector:

People view insurance as a crucial area of the financial services sector, and the number of insurance customers is steadily rising. As customers grow, so does the issue of unfair business practises in this industry. Insurance is a guarantee that the customer will be able to get a certain benefit or compensation for a loss or injury in the case of a future contingent occurrence. A lack of commission would result in a failure to fulfil that commitment or a delay in doing so. Consequently, it can be seen that a lot of dependence is put on the public's confidence in the delivery of the created assurances in the insurance industry. Businesses frequently use alluring offers to entice customers, but then try to increase their commitment. They have a number of extensive exclusion and exemption clauses that are helpful to large businesses.

Case Laws:

• Godfrey Philips India Ltd v. Ajay Kumar

The tobacco company's contested advertising was the target of the lawsuit. The product was oversubscribed under the name "red &White," along with the phrases "Red &White smokers are one of a kind." The packet also featured an image of the star Akshay Kumar and a paragraph outlining the negative effects of smoking. The petitioner felt certain that showing a prominent celebrity endorsing a cigarette with a tag on it would give people the impression that they had the power to pull out such actions. And this can make the buyer lose interest in the warning. Because the complaint was also filed in civil court, the district forum rejected it. When the case was brought before the National Commission, the appellants argued that there was no evidence of any harm or disaster brought on by the advertising. The National Commission had ruled that the litigant was not authorised to file because the case was not being brought on behalf of a volunteer organisation. The allurement was permitted without charge.

• N. Ravindranath Kamath v. Spice Communications Ltd 

According to a map of Karnataka supplied by WHO, the tower would be built in a neighbourhood known as Virajpet. Kamath filled out an application for the affiliation based on their assurance and paid them Rs. 3,100. A sim card worth Rs. 6,800 was given out. Despite being charged a total of Rs. 22/- per day, Kamath was unable to use the mobile phone from Virajpet because Spice Communications was unable to construct the tower. for more information, please contact Chris. The tower was not built by Spice Communications because it was not economically feasible. Kamath received a combined payment of Rs. 30,000 along with Rs. 10,000, and the Commission determined that this was an unfair trading practise.

Conclusion:

Huge sellers frequently subject consumers to unethical commercial tactics, and consumers fall victim to their ruthless economic rivalry. Due to customers learning about their rights under the Consumer Protection Act and pursuing recourse against unfair business practises, consumers in today's modernised world are paying more attention. Given the options available in Indian statutes and legislation and the numerous proactive policies and programmes being implemented by the government, the future of the system of consumer justice in our nation appears promising. The cluster of uneducated consumers needs to be made aware of their rights so they can protect themselves from monopolists' unjust business activities. The government should take steps to inform people about the several complaint procedures they can use if their legal rights as a customer are violated.