Law Commons^™

After Ftx: Can The Original Bitcoin Use Case Be Saved?, Mark Burge

Faculty Scholarship

Bitcoin and the other cryptocurrencies spawned by the innovation of blockchain programming have exploded in prominence, both in gains of massive market value and in dramatic market losses, the latter most notably seen in connection with the failure of the FTX cryptocurrency exchange in November 2022. After years of investment and speculation, however, something crucial has faded: the original use case for Bitcoin as a system of payment. Can cryptocurrency-as-a-payment-system be saved, or are day traders and speculators the actual cryptocurrency future? This article suggests that cryptocurrency has been hobbled by a lack of foundational commercial and consumer-protection law that …

Dynamic Pricing Algorithms, Consumer Harm, And Regulatory Response, Alexander Mackay, Samuel Weinstein

Articles

Pricing algorithms are rapidly transforming markets, from ride-sharing, to air travel, to online retail. Regulators and scholars have watched this development with a wary eye. Their focus so far has been on the potential for pricing algorithms to facilitate explicit and tacit collusion. This Article argues that the policy challenges pricing algorithms pose are far broader than collusive conduct. It demonstrates that algorithmic pricing can lead to higher prices for consumers in competitive markets and even in the absence of collusion. This consumer harm can be initiated by a single firm employing a superior pricing algorithm. Higher prices arise from …

Gamestop And The Reemergence Of The Retail Investor, Jill E. Fisch

All Faculty Scholarship

The GameStop trading frenzy in January 2021 was perhaps the highest profile example of the reemergence of capital market participation by retail investors, a marked shift from the growing domination of those markets by large institutional investors. Some commentators have greeted retail investing, which has been fueled by app-based brokerage accounts and social media, with alarm and called for regulatory reform. The goals of such reforms are twofold. First, critics argue that retail investors need greater protection from the risks of investing in the stock market. Second, they argue that the stock market, in term, needs protection from retail investors. …

European Union Food Law Update, Emilie H. Leibovitch

Journal of Food Law & Policy

This EU Food Law Update will focus on the recent developments in the areas of genetically modified organisms, novel foods, feed safety, transmissible spongiform encephalopathy, salmonella and food borne diseases, food additives, organic farming, food contact materials, and labeling.

United States Food Law Update: Health Care Reform, Preemption, Labeling Claims And Unpaid Interns: The Latest Battles In Food Law, A. Bryan Endres, Nicholas R. Johnson, Michaela N. Tarr

Journal of Food Law & Policy

This edition of the Food Law Update explores four legal issues arising in the first half of 2010 reflective of the diverse nature of the food law specialist. As the national debate surrounding the merits of health care reform dominated the legislative agenda, this article first will discuss the food labeling rules embedded within section 4205 of the Patient Protection and Affordable Care Act of 2010. The authors then analyze the preemptive reach of the Federal Food, Drug, and Cosmetic Act and the Meat Inspection Act with respect to three separate California statutes regarding animal welfare standards, retail labels on …

Bully No More: Why Trademark Owners Engage In Trademark Overreach And How To Prevent It, Quynh La

Washington Law Review

At its core, trademark law exists as a tool for consumer protection. Thus, trademark owners use policing and enforcement to maintain a trademark’s goodwill, which in turn protects consumers from confusion. But policing and enforcement can lead to trademark overreach and bullying—which undermine the goal of trademark law. This Comment explains that trademark owners are incentivized to engage in aggressive enforcement tactics because courts weigh enforcement efforts in favor of trademark strength. And strong trademarks receive strong protection because such marks are more likely to succeed in trademark infringement litigation. To curb trademark bullying and realign trademark law with its …

What’S In Your Wallet (And What Should The Law Do About It?), Natasha Sarin

All Faculty Scholarship

In traditional markets, firms can charge prices that are significantly elevated relative to their costs only if there is a market failure. However, this is not true in a two-sided market (like Amazon, Uber, and Mastercard), where firms often subsidize one side of the market and generate revenue from the other. This means consideration of one side of the market in isolation is problematic. The Court embraced this view in Ohio v. American Express, requiring that anticompetitive harm on one side of a two-sided market be weighed against benefits on the other side.

Legal scholars denounce this decision, which, …

Occupational Licensing And The Limits Of Public Choice Theory, Gabriel Scheffler, Ryan Nunn

All Faculty Scholarship

Public choice theory has long been the dominant lens through which economists and other scholars have viewed occupational licensing. According to the public choice account, practitioners favor licensing because they want to reduce competition and drive up their own wages. This essay argues that the public choice account has been overstated, and that it ironically has served to distract from some of the most important harms of licensing, as well as from potential solutions. We emphasize three specific drawbacks of this account. First, it is more dismissive of legitimate threats to public health and safety than the research warrants. Second, …

Given Today's New Wave Of Protectionsim, Is Antitrust Law The Last Hope For Preserving A Free Global Economy Or Another Nail In Free Trade's Coffin?, Allison Murray

Loyola of Los Angeles International and Comparative Law Review

No abstract provided.

Making Consumer Finance Work, Natasha Sarin

All Faculty Scholarship

The financial crisis exposed major faultlines in banking and financial markets more broadly. Policymakers responded with far-reaching regulation that created a new agency—the CFPB—and changed the structure and function of these markets.

Consumer advocates cheered reforms as welfare-enhancing, while the financial sector declared that consumers would be harmed by interventions. With a decade of data now available, this Article presents the first empirical examination of the successes and failures of the consumer finance reform agenda. Specifically, I marshal data from every zip code and bank in the United States to test the efficacy of three of the most significant post-crisis …

Online Dispute Resolution, Ronald A. Brand

Articles

This chapter was prepared from a presentation given by the author at the 2019 Summer School in Transnational Commercial Law & Technology, jointly sponsored by the University of Verona School of Law and the Center for International Legal Education (CILE) of the University of Pittsburgh School of Law. In the paper, I review online dispute resolution (ODR) by considering the following five questions, which I believe help to develop a better understanding of both the concept and the legal framework surrounding it:

A. What is ODR?

B. Who does ODR?

C. What is the legal framework for ODR?

D. What …

Behavioral Finance, Decumulation, And The Regulatory Strategy For Robo-Advice, Tom Baker, Benedict Dellaert

All Faculty Scholarship

This working paper surveys the decumulation services offered by investment robo-advisors as a case study with which to examine regulatory and market structure issues raised by automated financial advice. We provide a short introduction to decumulation, describing some of the uncertainties involved in identifying optimal decumulation strategies and sketching a few of the ‘rules of thumb’ that financial advisors have developed in this area in the face of this uncertainty. Next we describe behavioral effects that could inhibit consumers from following an optimal decumulation strategy, concluding that, left to their own devices, consumers are likely to make sub-optimal decumulation decisions. …

The Howey Test: Are Crypto-Assets Investment Contracts?, Justin Henning

University of Miami Business Law Review

With innovation always comes unknowns. Blockchain technology and crypto–assets are no different. Often times, innovators are so worried about getting their product to market or scaling at mass that they overlook the legal ramifications of their innovations. As Mark Zuckerberg infamously said, “move fast and break things.” Facebook was in no way alone in this style of innovation. However, with respect to crypto–assets, the SEC has stepped in and is attempting to prevent the “break things” aspect. One of the major issues relating to crypto–assets is that many people still do not understand what they are, or how the underlying …

Apple Pay, Bitcoin, And Consumers: The Abcs Of Future Public Payments Law, Mark Edwin Burge

Mark Edwin Burge

As technology rolls out ongoing and competing streams of payments innovation, exemplified by Apple Pay (mobile payments) and Bitcoin (cryptocurrency), the law governing these payments appears hopelessly behind the curve. The patchwork of state, federal, and private legal rules seems more worthy of condemnation than emulation. This Article argues, however, that the legal and market developments of the last several decades in payment systems provide compelling evidence of the most realistic and socially beneficial future for payments law. The paradigm of a comprehensive public law regulatory scheme for payment systems, exemplified by Articles 3 and 4 of the Uniform Commercial …

Big Data In Finance: Highlights From The Big Data In Finance Conference Hosted At The University Of Michigan October 27-28, 2016, Michael S. Barr, Brian Koziara, Mark D. Flood, Alfred Hero, H. V. Jagadish

Law & Economics Working Papers

How can financial data be made more accessible and more secure, as well as more useful to regulators, market participants, and the public? As new data sets are created, opportunities emerge. Vast quantities of financial data may help identify emerging risks, enable market participants and regulators to see and better understand financial networks and interconnections, enhance financial stability, bolster consumer protection, and increase access to the underserved. Data can also increase transparency in the financial system for market participants, regulators and the public. These data sets, however, can raise significant questions about security and privacy; ensuring data quality; protecting against …

Disruptive Platforms, Margot Kaminski

Publications

No abstract provided.

Apple Pay, Bitcoin, And Consumers: The Abcs Of Future Public Payments Law, Mark Edwin Burge

Faculty Scholarship

As technology rolls out ongoing and competing streams of payments innovation, exemplified by Apple Pay (mobile payments) and Bitcoin (cryptocurrency), the law governing these payments appears hopelessly behind the curve. The patchwork of state, federal, and private legal rules seems more worthy of condemnation than emulation. This Article argues, however, that the legal and market developments of the last several decades in payment systems provide compelling evidence of the most realistic and socially beneficial future for payments law. The paradigm of a comprehensive public law regulatory scheme for payment systems, exemplified by Articles 3 and 4 of the Uniform Commercial …

How The Internet, The Sharing Economy, And Reputational Feedback Mechanisms Solve The “Lemons Problem”, Adam Thierer, Christopher Koopman, Anne Hobson, Chris Kuiper

University of Miami Law Review

This paper argues that the sharing economy—through the use of the Internet and real time reputational feedback mechanisms—is providing a solution to the lemons problem that many regulators have spent decades attempting to overcome. Section I provides an overview of the sharing economy and traces its rapid growth. Section II revisits the lemons theory as well as the various regulatory solutions proposed to deal with the problem of asymmetric information. Section III discusses the relationship between reputation and trust and analyzes how reputational incentives affect commercial interactions. Section IV discusses how information asymmetries were addressed in the pre-Internet era. It …

Closing Fireside Chat With The Assistant Attorney General For The U.S. Department Of Justice Antitrust Division, William Baer, Philip J. Weiser

Publications

This Closing Fireside Chat was the final session of the 16th annual Silicon Flatirons Center conference, The Digital Broadband Migration: The Evolving Industry Structure of the Digital Broadband Landscape, held on Feb. 1, 2016 in the Wittemyer Courtroom of the University of Colorado Law School.

"At the time this conference was held, William J. Baer was Assistant Attorney General for Antitrust in the United States Department of Justice. On April 17, 2016, President Obama asked Mr. Baer to become Acting Associate Attorney General of the United States. Video of this interview with Assistant Attorney General Baer is available at https://www.youtube.com/watch?v=C351xEX0h4g …

A Psychological Account Of Consent To Fine Print, Tess Wilkinson-Ryan

All Faculty Scholarship

The moral and social norms that bear on contracts of adhesion suggest a deep ambivalence. Contracts are perceived as serious moral obligations, and yet they must be taken lightly or everyday commerce would be impossible. Most people see consent to boilerplate as less meaningful than consent to negotiated terms, but they nonetheless would hold consumers strictly liable for both. This Essay aims to unpack the beliefs, preferences, assumptions, and biases that constitute our assessments of assent to boilerplate. Research suggests that misgivings about procedural defects in consumer contracting weigh heavily on judgments of contract formation, but play almost no role …

Virtual Currencies: Bitcoin & What Now After Liberty Reserve, Silk Road, And Mt. Gox?, Lawrence J. Trautman

Lawrence J. Trautman Sr.

During 2013, the U.S. Treasury Department evoked the first use of the 2001 Patriot Act to exclude virtual currency provider Liberty Reserve from the U.S. financial system. This article will discuss: the regulation of virtual currencies; cybercrimes and payment systems; darknets, Tor and the “deep web;” Bitcoin; Liberty Reserve; Silk Road and Mt. Gox. Virtual currencies have quickly become a reality, gaining significant traction in a very short period of time, and are evolving rapidly. Virtual currencies present particularly difficult law enforcement challenges because of their: ability to transcend national borders in the fraction of a second; unique jurisdictional issues; …

What Do We Worry About When We Worry About Price Discrimination? The Law And Ethics Of Using Personal Information For Pricing, Akiva A. Miller

Akiva A Miller

New information technologies have dramatically increased sellers’ ability to engage in retail price discrimination. Debates over using personal information for price discrimination frequently treat it as a single problem, and are not sufficiently sensitive to the variety of price discrimination practices, the different kinds of information they require in order to succeed, and the different ethical concerns they raise. This paper explores the ethical and legal debate over regulating price discrimination facilitated by consumers’ personal information. Various kinds of “privacy remedies”—self-regulation, technological fixes, state regulation, and legislating private causes of legal action—each have their place. By drawing distinctions between various …

Licensure Of Health Care Professionals: The Consumer's Case For Abolition, Charles H. Baron

Charles H. Baron

While state medical licensure laws ostensibly are intended to promote worthwhile goals, such as the maintenance of high standards in health care delivery, this Article argues that these laws in practice are detrimental to consumers. The Article takes the position that licensure contributes to high medical care costs and stifles competition, innovation and consumer autonomy. It concludes that delicensure would expand the range of health services available to consumers and reduce patient dependency, and that these developments would tend to make medical practice more satisfying to consumers and providers of health care services.

Some Challenges Facing A Behaviorally-Informed Approach To The Directive On Unfair Commercial Practices, Avishalom Tor

Book Chapters

Series: Economic Analysis of Law in European Legal Scholarship, vol. 2

The Directive on Unfair Commercial Practices seeks to protect consumers by prohibiting, inter alia, misleading practices, which are defined as practices that are likely to mislead the average consumer and thereby likely to cause him to take a transactional decision he would not have taken otherwise (Directive 2005/29/ EC of the European Parliament and of the Council). While determinations of what constitutes average consumer behavior, what misleads consumers, or how consumers make transactional decisions all can be made as a matter of law, based on anecdotal observations, intuitions or …

Marks, Morals, And Markets, Jeremy N. Sheff

Faculty Publications

The prevailing justification for trademark law depends on economic arguments that cannot account for much of the law's recent development, nor for mounting empirical evidence that consumer decisionmaking is inconsistent with assumptions of rational choice. But the only extant theoretical alternative to economic analysis is a Lockean "natural rights" theory that scholars have found even more unsatisfying. This Article proposes a third option. I analyze the law of trademarks and unfair competition as a system of moral obligations between producers and consumers. Drawing on the contractualist tradition in moral philosophy, I develop and apply a new theoretical framework to evaluate …

Sea Changes In Consumer Financial Protection: Stronger Agency And Stronger Laws, Dee Pridgen

Dee Pridgen

This article tracks the rising influence of behavioral economics as a guiding force in consumer protection. The Consumer Financial Protection Agency, formed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, is a new and stronger agency for consumers. Two pieces of legislation, the Mortgage Reform and Anti-Predatory Lending Act (Title XIV of Dodd-Frank), and the Credit Card Accountability , Responsibility and Disclosure Act (Credit CARD Act) of 2009, are stronger laws ensuring the safety of consumer financial products. This article examines the new agency and the new laws, explains how they differ from the prior governmental …

Freedom Of Contract In An Augmented Reality: The Case Of Consumer Contracts, Scott R. Peppet

Publications

This Article argues that freedom of contract will take on different meaning in a world in which new technology makes information about places, goods, people, firms, and contract terms available to contracting parties anywhere, at any time. In particular, our increasingly "augmented reality" calls into question leading justifications for distrusting consumer contracts and strengthens traditional understandings of freedom of contract. This is largely a descriptive and predictive argument: This Article aims to introduce contract law to these technologies and consider their most likely effects. It certainly has normative implications, however. Given that the vast majority of consumer contracting occurs in …

The Rome I Regulation Rules On Party Autonomy For Choice Of Law: A U.S. Perspective, Ronald A. Brand

Articles

This chapter was presented at a conference in Dublin on the (then) new Rome I Regulation of the European Union in the fall of 2009. It contrasts the Rome I rules on party autonomy with those in the United States. In particular, it considers the rules in the Rome I Regulation that ostensibly protect consumers by discouraging party agreement on a pre-dispute basis to the law governing a consumer contract. These rules are compared with the absence of private international law restrictions on choice of forum and choice of law in the United States, even in consumer contracts. The result …

Balancing Of Markets, Litigation And Regulation, Keith N. Hylton, Larry E. Ribstein, Paul H. Rubin, Todd J. Zywicki

Faculty Scholarship

In addition to judicial education programs that the Law and Economics Center conducts, we also have a division that focuses on public policy research, known as the Searle Civil Justice Institute. In November, we held a public policy roundtable where we commissioned a variety of research and brought together a group of experts, both academic and practitioner experts, to discuss the issue of balancing the appropriate roles of markets, litigation, and regulation. And the notion there is that each one - markets, litigation, and regulation - can and probably should play a role in addressing various consumer harms.

Code, Crash, And Open Source: The Outsourcing Of Financial Regulation To Risk Models And The Global Financial Crisis, Erik F. Gerding

Publications

The widespread use of computer-based risk models in the financial industry during the last two decades enabled the marketing of more complex financial products to consumers, the growth of securitization and derivatives, and the development of sophisticated risk-management strategies by financial institutions. Over this same period, regulators increasingly delegated or outsourced vast responsibility for regulating risk in both consumer finance and financial markets to these privately owned industry models. Proprietary risk models of financial institutions thus came to serve as a "new financial code" that regulated transfers of risk among consumers, financial institutions, and investors.

The spectacular failure of financial-industry …