By: Lance Lester Angelo Sim
The Covid-19 pandemic has brought about numerous changes in our society, as well as a few realizations in our lives. One thing that is made even more apparent amidst this pandemic is that how we are now becoming even more dependent upon computer devices such as laptops, tablets, and other devices that could access the internet.
Such is not surprising seeing that most people are staying at their homes and hoping for the pandemic to end. While waiting, people would use their devices to access the internet to continue human interactions or to be productive.
Having access to the internet is no longer just a luxury. It is a necessity. The internet serves as a bridge which not only gives people access to information, but also connects people without ever needing to leave their homes. It allows people to continue to have their jobs through work-from-home arrangements and allows students to continue their education through online schooling.
A Report from a Special Rapporteur of the United Nations (UN) recognized that the internet is a “catalyst” for individuals which facilitates the realization of human rights.[1] It provides people with an alternative means of progressing with their daily lives.
However, the frequent lockdowns and the closure of factories have stunted the production of these devices causing a shortage of supply. Furthermore, there are unscrupulous people who would take advantage of the situation –- those commonly referred to as “scalpers.”
A scalper is “someone who buys things, such as [event] tickets [or new electronics], at the usual prices and then sells them, when they are difficult to get, at much higher prices.”[2] Scalpers would take advantage of the current situation by buying or hoarding products in great demand and reselling them for profit.
An example of such an instance is when the prices of N95 and surgical masks skyrocketed earlier this year due to the increase in the demand following the eruption of the Taal Volcano, and the outbreak of Covid-19.
Since the products that are “scalped” are usually necessities, there would always be some desperate buyers. As a consequence, these scalpers can make easy money from the desperations of the people.
This would then lead us to the issue of fairness. Let us take a short glimpse of what could be the applicable law/s.
On April 13, 1992, Congress enacted Republic Act (R.A.) No. 7394, or the Consumer Act of the Philippines,[3] in order “to protect the interests of the consumer, promote his general welfare and to establish standards of conduct for business and industry.”[4] This law prohibits unfair or unconscionable sales by a seller, to wit:
ARTICLE 52. Unfair or Unconscionable Sales Act or Practice. — An unfair or unconscionable sales act or practice by a seller or supplier in connection with a consumer transaction violates this Chapter whether it occurs before, during or after the consumer transaction. An act or practice shall be deemed unfair or unconscionable whenever the producer, manufacturer, distributor, supplier or seller, by taking advantage of the consumer’s physical or mental infirmity, ignorance, illiteracy, lack of time or the general conditions of the environment or surroundings, induces the consumer to enter into a sales or lease transaction grossly inimical to the interests of the consumer or grossly one-sided in favor of the producer, manufacturer, distributor, supplier or seller.
In determining whether an act or practice is unfair and unconscionable, the following circumstances shall be considered:
xxx
b) that when the consumer transaction was entered into, the price grossly exceeded the price at which similar products or services were readily obtainable in similar transaction by like consumers;
On that same year, Congress also enacted R.A. No. 7581, or the Price Act,[5] as amended by R.A. 10623,[6] which aims “to ensure the availability of basic necessities and prime commodities at reasonable prices at all times without denying legitimate business a fair return on investment”[7] and “to provide effective and sufficient protection to consumers against hoarding, profiteering and cartels with respect to the supply, distribution, marketing and pricing of said goods, especially during periods of calamity, emergency, widespread illegal price manipulation and other similar situations.”[8] True to its policy, the law considers the acts of hoarding or profiteering of basic necessities and prime commodities as unlawful, to wit:
SECTION 5. Illegal Acts of Price Manipulation. — Without prejudice to the provisions of existing laws on goods not covered by this Act, it shall be unlawful for any person habitually engaged in the production, manufacture, importation, storage, transport, distribution, sale or other methods of disposition of goods to engage in the following acts of price manipulation of the price of any basic necessity or prime commodity.
(1) Hoarding, which is the undue accumulation by a person or combination of persons of any basic or prime commodity beyond his or their normal inventory levels or the unreasonable limitation or refusal to dispose of, sell or distribute the stocks of any basic necessity of prime commodity to the general public or the unjustified taking out of any basic necessity or prime commodity from the channels of reproduction, trade, commerce and industry. xxx
(2) Profiteering, which is the sale or offering for sale of any basic necessity or prime commodity at a price grossly in excess of its true worth. xxx
In addition, R.A. No. 11469, or the Bayanihan to Heal as One Act,[9] was signed into law on March 24, 2020, which authorized the president to exercise special temporary powers which would be necessary to deal with the Covid-19 pandemic. One of such powers is penalizing acts of hoarding, profiteering, manipulation of prices, monopolies, or other combinations in restraint of trade, or other malicious practices concerning the goods as enumerated under the law, to wit:
SECTION 6. Penalties. — In addition to acts or omissions already penalized by existing laws, the following offenses shall be punishable with imprisonment of 2 months or a fine of not less than P10,000.00, but not more than P1,000,000.00, or both, such imprisonment and fine, at the discretion of the court:
xxx
(c) Engaging in hoarding, profiteering, injurious speculations, manipulation of prices, product deceptions, and cartels, monopolies or other combinations in restraint of trade, or other pernicious practices affecting the supply, distribution and movement of food, clothing, hygiene and sanitation products, medicine and medical supplies, fuel, fertilizers, chemicals, building materials, implements, machinery equipment and spare parts required in agriculture, industry and other essential services, and other articles of prime necessity, whether imported or locally produced or manufactured.
A perusal of the above-cited provisions of law shows that the Price Act, as amended, and the Bayanihan to Heal as One Act are not applicable when the products subject to price regulation are computer devices, since these do not fall upon those which were enumerated by law. The Bayanihan to Heal as One Act limits the coverage of the goods subjected to the penalized acts. Such is also true for the Price Act, as amended, as it applies only to basic necessities and prime commodities – the definitions of which are also clearly limited.
The Price Act, as amended, defined ‘[b]asic necessities’ as: “goods vital to the needs of consumers for their sustenance and existence … but not limited to, rice, corn, root crops, bread; fresh, dried or canned fish and other marine products; fresh pork, beef and poultry meat; … and such other goods as may be included under Section 4 of this Act.”[10]
On the other hand, ‘prime commodities’ are defined as “goods not considered as basic necessities but are essential to consumers … but not limited to, flour; dried, processed or canned pork, beef and poultry meat; … and such other goods as may be included under Section 4 of this Act.”[11]
Although it may be true that computer devices are not part of the enumeration of either basic necessities or prime commodities, Section 4 of The Price Act, as amended allows the inclusion and exclusion of what was enumerated, to wit:
SECTION 4. Inclusion or Exclusion from the Coverage of This Act. — Upon petition of the concerned parties or motu proprio action from the concerned agency of the Price Coordinating Council and after public hearing, the implementing agency, with the approval of the President, may include in the definition of basic necessities or prime commodities types and brands of the goods or may exclude from the coverage of this Act, types or brands of the goods included in the definition of basic necessities and prime commodities, which may be deemed as nonessential goods or luxury goods: Provided, That, any type or brand so excluded may be reinstated by the implementing agency during occasions of acute shortage in the supply of the basic necessity or prime commodity to which the excluded type or brand used to belong.
In other words, the law allows the changing of what is to be considered or covered as basic necessities or prime commodities.
From the provisions of the Consumer Act, it appears that this law could be applied to regulating the conduct of scalpers. In fact, it might fit in squarely since the law punishes deceptive, unfair, and unconscionable sales act or practice – and this includes the act of taking advantage of the situation. Moreover, it appears that there is no limitation as to what products or goods which should be the subject of the transaction.
Knowing that there is a law that could be invoked by the consumers against “scalpers” would give the former a small sigh of relief. At the very least, the consumers would know that they have the right against these “scalpers.” In this time of the pandemic, people should be helping each other. It is not the time to take advantage of one another.
[1] Frank La Rue, Report of the Special Rapporteur on the promotion and protection of the right to freedom of opinion and expression, United Nations General Assembly, (May 16, 2011), https://www2.ohchr.org/english/bodies/hrcouncil/docs/17session/A.HRC.17.27_en.pdf
[2] Scalper, Cambridge Dictionary, https://dictionary.cambridge.org/us/dictionary/english/scalper (last accessed December 12, 2020).
[3] The Consumer Act of the Philippines, Republic Act No. 7394.
[4] Id., Art. 2.
[5] An Act Providing Protection to Consumers by Stabilizing the Prices of Basic Necessities and Prime Commodities and by Prescribing Measures against Undue Price Increases During Emergency Situations and Like Occasions, Republic Act No. 7581 [hereinafter R.A. 7581].
[6] An Act Amending Certain Provisions of Republic Act No. 7581, Entitled “An Act Providing Protection to Consumers by Stabilizing the Prices of Basic Necessities and Prime Commodities and by Prescribing Measures against Undue Price Increases During Emergency Situations and Like Occasions” and for Other Purposes, Republic Act No. 10623 [hereinafter R.A. 10623].
[7] R.A. 7581, Sec. 2.
[8] Id.
[9] An Act Declaring the Existence of a National Emergency arising from the Corona Virus Disease 2019 (Covid-19) Situation and a National Policy in Connection therewith, and Authorizing the President of the Republic of The Philippines for a Limited Period and Subject to Restrictions, to Exercise Powers Necessary and Proper to Carry Out the Declared National Policy and for Other Purposes, Republic Act No. 11469.
[10] R.A. 10623, Sec. 1.
[11] Id., Sec. 2.
