Overpricing, hoarding? Watch out for these illegal acts amid fuel crisis

At the height of the fuel crisis in the country triggered by the US-Israel war against Iran, some actors are allegedly taking advantage of the situation to commit illegal acts.

The Philippine National Police (PNP) said on March 27 that at least six complaints were filed against individuals who committed fuel crisis-related offenses. These include hoarding, profiteering, and unfair competition.

What are these acts, why are they illegal, and how are they committed?

Hoarding, profiteering

Republic Act (RA) No. 7581 or the Price Act was enacted in 1992 to provide protections by “stabilizing the prices of basic necessities and prime commodities and by prescribing measures against undue price increases during emergency situations and like occasions to consumers.”

Apart from ensuring the availability of basic necessities at reasonable prices, the Price Act also bans illegal acts that might affect the supply, distribution, and pricing of goods “especially during periods of calamity, emergency,” among others.

The banned acts under RA No. 7581’s Section 5 are as follows:

• Hoarding. This act is defined under the law as the “undue accumulation” by a person or group of people of any basic necessity or commodity beyond their normal inventory levels.
  • This is also committed when a person or group of people refuses to dispose or sell the stock to the general public.
  • On top of these, hoarding is also done when a person or group of people take out any basic necessity or commodity from the channels of production, trade, commerce, or industry.
  • Hoarding can be proven when a person or group of people has stocks of necessities or commodities 50% higher than their usual inventory, and “unreasonably limits, refuses or fails to sell the same to the general public at the time of discovery of the stocks.”
  • On inventory: “The determination of a person’s usual inventory shall be reckoned from the third month immediately preceding before the discovery of the stocks in case the person has been engaged in the business for at least three (3) months; otherwise, it shall be reckoned from the time he started his business.”

• Profiteering. Also known as overpricing. This act is committed when a person is selling or offering any basic necessity or commodity at a price beyond its true worth.
  • This can be proven when the necessities or commodities are sold with no price tag, misrepresented as to its weight or measurement, adulterated or diluted, or when a person raises the price by more than 10% of its price in the immediately preceding month.

• Cartel. This is committed when two or more people “engaged in the production, manufacture, processing, storage, supply, distribution, marketing, sale or disposition” of necessities or commodities worked to artificially and unreasonably increase the prices.
  • This can be proven when two or more persons or business from the same market and dealing with the same products “perform uniform or complementary acts” among themselves that may cause artificial and unreasonable increase in prices.
  • This act can also be proven when actors “simultaneously and unreasonably increase prices on their competing products thereby lessening competition among themselves.”

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Persons proven to have committed these illegal acts may be jailed for a minimum of five years, but not more than 15 years. They may also be fined P5,000 at the minimum, and P2 million at the maximum.

When a government official or employees conspired in the commission of these illegal acts or concealed the violations, they will suffer additional penalty of permanent disqualification to hold public office.

Unfair competition

RA No. 8293 or the Intellectual Property Code of the Philippines may also be violated in the context of products and supply.

The law lists two violations: unfair competition and false description or representation.

• Unfair competition. This is done when a person “[employs] deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair competition, and shall be subject to an action therefor.”
  • According to the law, these acts constitute unfair competition:
  • A person who sells goods and gives general appearance of goods made by another manufacturer that would likely influence the purchasing behavior of the buyers.
  • A person who clothes the goods with an appearance that will deceive the public and defraud others of their legitimate trade.
  • A person who uses means to induce false belief “that such person is offering the services of another who has identified such services in the mind of the public.”
  • A person who makes false statements in the course of trade.

• False designations of origin, description, or representation. This act is committed when there is a false designation of origin, false or misleading description of fact, or false or misleading representation of fact.
  • This is illegal because these acts may likely cause confusion, mistake, or deception as to the affiliation or association of such person with another person, in the approval of his/her goods, or commercial activities by another person.

A person who will be found guilty of committing these acts may be imprisoned for two to five years, and be fined P50,000 up to P200,000. – Rappler.com