6. Restrictive and Unfair Trade Practices

This is the 6th post in Law of Torts, Unit 5 — The Consumer Protection Act, 2019. This post explains two further statutory wrongs distinct from a simple "defect" or "deficiency" — unfair trade practices, which target deceptive market conduct, and restrictive trade practices, which target conduct distorting the market itself.

The Problem This Topic Solves

Not every consumer harm involves a physically faulty product or a carelessly performed service — a consumer can be harmed even by goods and services that work perfectly well, simply because they were sold through deception, manipulation, or market conduct designed to limit the consumer's real options. The Consumer Protection Act, 2019 addresses this separate category of harm through two distinct statutory concepts: "unfair trade practice", which targets dishonest or deceptive selling methods, and "restrictive trade practice", which targets conduct that manipulates the market itself — price, supply, or delivery conditions — to the consumer's detriment. This topic explains both concepts and how they differ from each other and from "defect" and "deficiency".

Unfair Trade Practice — The Statutory Definition

Section 2(47) of the Consumer Protection Act, 2019 defines "unfair trade practice" as 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, and the section then sets out an extensive, illustrative list of specific practices that qualify — including falsely representing that goods are of a particular standard, quality, or grade; falsely representing that a service is of a particular standard; making a false or misleading representation about the need for, or usefulness of, goods or services; giving false guarantees or warranties; disparaging the goods or services of a competitor through false or misleading representations; and, notably in the 2019 Act, disclosing to any other person any personal information given in confidence by the consumer, unless required by law or in the public interest.

Illustrative Categories of Unfair Trade Practice

Among the practices the Act treats as unfair, several recur most often in litigation: false representation of the standard, quality, quantity, grade, composition, style, or model of goods; sale of goods that do not comply with a mandatory safety or quality standard prescribed by a competent authority; hoarding, destruction, or refusal to sell goods with the intention of raising the cost of those or other goods; and material misleading of the public as to the price at which goods or services are ordinarily sold (such as advertising an artificially inflated "original price" alongside a discount to create a false impression of savings). The common thread running through all of these is that the practice involves some form of deception or dishonesty directed at the consumer's decision-making, rather than a defect in the product or a failure in performing a service.

Restrictive Trade Practice — The Statutory Definition

Section 2(41) defines "restrictive trade practice" as a trade practice which tends to bring about manipulation of price, or its conditions of delivery, or to affect the flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions, and expressly includes: delaying, without sufficient cause, the supply of goods or the performance of a service, so as to give rise to a rise in the price; and any trade practice that requires a consumer to buy, hire, or avail of any goods or services as a condition precedent to buying, hiring, or availing of other goods or services (commonly known as a "tie-in arrangement"). Unlike unfair trade practice, which centres on deception of the individual consumer, restrictive trade practice centres on distortion of the market's ordinary functioning, which then harms consumers collectively through inflated prices or reduced choice.

The Tie-In Arrangement — A Leading Illustration

The clearest example of a restrictive trade practice under the Act is the tie-in arrangement — a seller conditioning the sale of one product (which the consumer genuinely wants) on the consumer also purchasing a second, unrelated product they may not want at all, using the market power over the first product to force a sale of the second. Because such an arrangement is not about deceiving the consumer regarding facts, but about coercing a purchase decision through market leverage, it is classified as restrictive rather than unfair, even though both ultimately harm the consumer.

Distinguishing Unfair and Restrictive Trade Practices from Defect and Deficiency

A useful way to organise these four statutory wrongs is by asking what, precisely, went wrong. If the goods themselves are physically substandard, the wrong is a "defect". If a service was carried out carelessly or incompletely, the wrong is a "deficiency". If the consumer was deceived about the goods or service through false claims, guarantees, or comparisons — even if the goods or service themselves might otherwise have been perfectly adequate — the wrong is an "unfair trade practice". And if the consumer was forced into unfavourable terms, delayed supply, or a tie-in purchase because of the seller's manipulation of market conditions rather than any direct deception, the wrong is a "restrictive trade practice". A single set of facts can sometimes give rise to more than one of these wrongs simultaneously.

Remedies Against Unfair and Restrictive Trade Practices

A consumer harmed by an unfair or restrictive trade practice can complain before the appropriate Consumer Commission, which can order the practice to be discontinued and award compensation for any resulting loss. In addition, since these are practices that typically harm consumers as a class rather than causing an isolated individual injury, the Central Consumer Protection Authority (examined in a later post in this unit) has an independent, suo motu power to investigate and act against such practices, ordering their discontinuation and imposing penalties, even without any individual consumer having filed a complaint at all.

• "Unfair trade practice" (Section 2(47)) targets deceptive selling methods — false representations about standard, quality, or need; false guarantees; disparagement of a competitor; and unauthorised disclosure of a consumer's confidential personal information.
• "Restrictive trade practice" (Section 2(41)) targets manipulation of the market itself — price, delivery conditions, or supply — including unjustified delay to raise prices, and tie-in arrangements.
• A tie-in arrangement — conditioning the sale of one product on purchasing another — is the classic example of a restrictive trade practice.
• Defect = physical fault in goods; deficiency = careless performance of a service; unfair trade practice = deception about goods/service; restrictive trade practice = market manipulation harming consumers collectively.
• The CCPA can act suo motu against unfair and restrictive trade practices, in addition to a consumer's own complaint before a Commission.

• Advertising an artificially inflated "original price" next to a discounted price to create a false impression of savings is a recognised form of unfair trade practice.
• The 2019 Act's inclusion of unauthorised disclosure of confidential consumer information as an unfair trade practice is a modern addition reflecting concerns about data privacy in e-commerce.
• A single transaction can involve both an unfair trade practice (deception) and a restrictive trade practice (market manipulation) at the same time.

A Practical Example

A mobile phone retailer refuses to sell a popular new phone model to a customer unless the customer also purchases an expensive extended warranty and a specific brand of accessories from the same retailer, even though the customer wants only the phone itself and no add-ons. This is a restrictive trade practice — a tie-in arrangement requiring the consumer to buy goods they do not want as a condition of buying the goods they do want, manipulating the consumer's choice through the retailer's market position on the popular phone model, rather than through any false statement about the phone or the accessories. If, in addition, the retailer had falsely told the customer that the warranty was "mandatory under law", that additional false representation would separately amount to an unfair trade practice.

Quick Revision Points

• Unfair trade practice (Sec. 2(47)) = deceptive method to promote sale/use/supply — false representations, false guarantees, disparagement, unauthorised disclosure of confidential information.
• Restrictive trade practice (Sec. 2(41)) = manipulation of price/delivery/supply causing unjustified cost/restriction — includes unjustified delay to raise prices and tie-in arrangements.
• Tie-in arrangement = classic restrictive trade practice — conditioning sale of one good/service on buying another.
• Defect (goods) / Deficiency (service) / Unfair trade practice (deception) / Restrictive trade practice (market manipulation) — four distinct statutory wrongs, sometimes overlapping on the same facts.
• CCPA can act suo motu against unfair/restrictive trade practices, beyond individual Commission complaints.