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The unjustified increase in prices due to war is an abusive practice

April 18, 2022

By: Leonardo Neri

One of the analyses we have been developing is about consumer rights in the face of the uncontrolled inflation we are being subjected to, not only in Brazil, but worldwide. Obviously, the pandemic and the Ukraine/Russia war play an important role in this situation, but I also think it is important to note that these factors are not the only ones responsible for this difficult situation the world is going through.

In Brazil, for example, there is the problem of systemic corruption, that is, corruption that is already considered “common” given its existence in the interfaces of the public/private system. Everything is done to prioritize this corruption; therefore, the need is to know to what extent the pandemic and the war have led this situation back to extremely high levels of inflation. Which is nothing more than a return to barbarism.

Another factor to be analyzed is why the production chain does not fully develop in each country that has the potential to do so. Agribusiness has already shown that Brazil is self-sufficient in soybean production, for example. And here the question is: Why should we rely on this Ukrainian commodity? Wheat has already increased by more than 20%, and corn should also be impacted by the war, since Ukraine is responsible for around 16% of all cereal production.

Why repeat what happened in World War II, when Stalin exported grain from Ukraine and Ukrainians died of hunger? History already has examples that could lead to an attempt to make changes in order to minimize the approaching famine on a global scale.

Unjustified price increases are abusive practices provided for in Article 39, X, of the Consumer Protection Code and should not be confused with arbitrary profit increases provided for in competition law. Unjustified price increases are a type of abuse in the exercise of the supplier's freedom of negotiation, according to abusive practices in consumer protection law.

This does not mean that any price increase – even if it is to maximize profits – is abusive in itself. After all, we live in a market economy. However, there are limits that must be considered, associated with good faith and the consumer's own vulnerability in a given specific situation. The best way for the consumer to protect themselves is to research whether there is a significant difference in prices compared to those of competitors in the same market, in order to assess whether it is a more relevant issue that has impacted the marketing chain, or even an isolated abuse.

According to the constitutional principle of free enterprise (articles 1, section IV and 170, section IV of the Federal Constitution), market agents are free to freely set the prices of their products. It is up to the trader to establish the remunerative price of their investments, products and services, with the market being the price parameter.

Eventually, it will be up to CADE to open an investigation into allegedly abusive prices, if there is evidence of collusive activity or other anticompetitive practice. In short, free enterprise is the rule, and state intervention (article 173, paragraph 4 of the Federal Constitution) should be the exception.

The role of the Consumer Protection Code

The Consumer Protection Code (CDC) aims to protect the vulnerable and weaker party in the consumer relationship, which is the consumer. The CDC provides for the modification or review of contractual clauses in exceptional situations, such as force majeure, which make compliance with the agreed obligations excessively onerous (article 6, V).

If it is not possible to comply with the contract due to abuse faced during the provision of a service, both the supplier, service provider and consumer must renegotiate the contract, postponing, when possible, the event, such as: courses; provision of a service, etc., seeking the best situation for both parties.

And if the company does not want to or refuses to renegotiate, in good faith under the contract, the consumer must file a complaint with the company's customer service department (SAC) and, if they do not receive a response, they must seek out consumer protection agencies or file a lawsuit against the contracted service provider or supplier, so that their rights are guaranteed.

Perhaps it is time to rethink the paths of our civilization a little, leaving aside economic priorities in favor of humanistic priorities.

https://www.migalhas.com.br/depeso/363979/a-elevacao-sem-justa-causa-dos-precos-em-decorrencia-da-guerra

This communication, which we believe may be of interest to our customers and friends of the company, is intended for general information only. It is not a complete analysis of the matters presented and should not be considered legal advice. In some jurisdictions, this may be considered lawyer advertising. Please see the company's privacy notice for more details.

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