COMPETITION LAW AND PROTECTION OF CONSUMER INTEREST

1. INTRODUCTION
The modern competition law seeks to protect the process of free market competition in order to
ensure efficient allocation of economic resources. It is commonly believed that competition law
is ultimately concerned with the interest of the consumers. The Constitution of India provides for
the Directive Principles of State Policy and Articles 38 and 39 of the Constitution mandate upon
States to secure a social order for the promotion and welfare of the people. This provision
recognized the need to eliminate and minimize the inequalities in income, which applied not only
to the individuals but also to the groups in different areas. Article 39(c) of the Constitution
provides that the States shall strive to secure that the operation of the economic system does not
result in the concentration of wealth and means of production to the common detriment.
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The Monopolies and Restrictive Trade Practices Act came into existence on 27 December,
1969. The preamble to this enactment provided it to be An Act to provide that the operation of
the economic system does not result in the concentration of the 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. Though the primary aim of
MRTP Act, 1969 was to prevent economic power concentration, the other objectives remained
overall development of the country etc.
It may be observed that consumers detriment is generally presumed to be present when the
competitive process is thwarted or damaged. Consumer is considered to be King in a free market
and the sellers are supposed to be guided by the will of a consumer in such markets. There is a
constant need for harmonizing the protection of consumer rights with promoting free markets. In

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COMPETITION LAW AND PROTECTION OF CONSUMER INTEREST

Awaz v. Reserve Bank of India and DCM Financial Services Ltd. v. Mukesh Rajput, 2008 Bus
L R764 (NCDRC), the National Consumer Disputes Redressal Commission, while
deciding the issue of interest on credit taken on the basis of credit card in its joint order
disposing both cases observed:
[E]ven in any free economy/deregulated economy exploitation of the
borrower/debtor is prohibited and is considered to be unfair trade
practice. Free economy would not mean license to exploit the
borrowers/debtors by taking advantage of their basic needs for their
livelihood. This cannot be permitted in any civilized society maybe
a de-regulated free market economy.

In Ashoka Smokeless Coal Ind. P. Ltd. v. Union of India,

the Honble Supreme Court

reflecting on consumers interest observed:

In a market governed by free economy where competition is the buzzword,
producers may fix their own price. It is, however, difficult to give effect to
the constitutional obligations of a State and the principles leading to a
free economy at the same time. A level playing field is the key factor for
invoking the new economy. Such a level playing field can be achieved
when there are a number of suppliers and when there are competitors in the
market enabling the consumer to exercise choices for the purpose of
procurement of goods.

(2007) 2 SCC 640.

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