Consumer Protection Law Commons^™

Birthdate Phaseout, Katharine B. Silbaugh

Faculty Scholarship

This Article explores the Nicotine Free Generation ("NFG") policy, an emerging endgame strategy for tobacco products that employs a completely novel legal design. Tobacco remains the leading cause of preventable death, killing almost half of its users and imposing $600 billion in social costs each year. We see two basic choices for regulating sales: prohibition or a legal age-gate, such as twenty-one, for retail sales. NFG charts a third way. Recognizing the dire harm of tobacco and the serious consequences of abrupt prohibition, NFG lays the groundwork for a gradual transition to a sales sunset. In place of the twenty-one …

Beyond Digital Pessimism: How A Focus On Trust Can Enhance Eu Digital Law, Neil Richards, Woodrow Hartzog, Claire Boine, Lea Despotis

Faculty Scholarship

Lawmakers looking to foster technological innovation on the European market are adopting laws they hope will promote consumer trust in digital products. Their strategy can be broken down into three components. First, they aim to empower consumers to choose how much data they want to share with companies through an express consent framework. Second, they seek to avoid harms from digital products through product safety law such as adapting the Product Safety Regulation to digital products or adopting the AI Act. Third, they endeavor to prevent manipulation of consumers through digital means.

In this essay, we argue that while laudable, …

Measuring And Mitigating Drip Pricing Overcharge: Evidence From An Online Marketplace Experiment With A Digital Shopping Assistant, Benjamin Lu, Daniel Markovits, Andrew Miller, Rory Van Loo

Faculty Scholarship

We study how much drip pricing (hidden mandatory fees revealed after consumers have begun the buying process) raises prices paid for identical goods and whether an automated shopping assistant mitigates the effect. In a randomized online marketplace experiment (n = 1608) with real purchases of gift cards funded by a $15 endowment, we vary the initial and final presentation of the gift cards’ prices across 33 levels and randomly assign participants to an automated assistant that flags a lower-price identical option and links to it. Relative to transparent pricing, drip pricing increases the average price paid by up to a …

Against Monetary Primacy, Yair Listokin, Rory Van Loo

Faculty Scholarship

To reduce inflation, the Federal Reserve (Fed) raises interest rates. But every month with high interest rates increases the risk of a devastating recession. Recessions impose not only short-term pain in the form of widespread unemployment but also lifelong harm for many, as vulnerable workers and those who start their careers during a downturn never fully recover. Yet hiking interest rates is the centerpiece of U.S. inflation-fighting policy. When inflation is high, the Fed raises interest rates until inflation is tamed, regardless of the consequent sacrifices. We call this inflation-fighting paradigm “monetary primacy.” Despite its great risks, monetary primacy has …

Promises, Promises: Understanding Claims Made In Social Robot Consumer Experiences, Johanna Gunawan, Sarah Elizabeth Gillespie, David Choffnes, Woodrow Hartzog, Christo Wilson

Faculty Scholarship

Social robots are a class of emerging smart consumer electronics devices that promise sophisticated experiences featuring emotive capabilities, artificial intelligence, conversational interaction, and more. With unique risk factors like emotional attachment, little is known on how social robots communicate these promises to consumers and whether they adequately deliver upon them within their overall product experiences prior to and during user interaction.

Animated by a consumer protection lens, this paper systematically investigates manufacturer claims made for four commercially available social robots, evaluating these claims against the provided user experience and consumer reviews. We find that social robots vary widely in the …

Consumer Agents, Rory Van Loo

Faculty Scholarship

In the twenty-first century economy, individuals need market help that they are not getting. The technology has long existed for a browser plug-in that would filter out toxic social media content or a virtual shopping assistant that would find and even purchase the best deals online without having to go to many different websites and product pages. Yet tech platforms have used lawsuits and data control to stifle such tools. The lack of digital helpers has potentially profound consequences. Social media use is linked to alarming increases in teenage depression and anxiety. Businesses’ ability to manipulate consumers into paying higher …

Amazon's Pricing Paradox, Rory Van Loo, Nikita Aggarwal

Faculty Scholarship

Antitrust scholars have widely debated the apparent paradox of Amazon seemingly wielding monopoly power while offering low prices to consumers. A single company’s behavior thereby helped spark an intellectual renaissance as scholars debated why Amazon’s prices were so low, whether antitrust enforcers should intervene, and, eventually, how the field should be reformed for the era of large online platforms. One of the few things that all parties have agreed upon amidst those contentious conversations is that Amazon offers low prices. This Article challenges that assumption by demonstrating that Amazon charges higher prices than commonly understood. More importantly, unraveling the disconnect …

The Public Stakes Of Consumer Law: The Environment, The Economy, Health, Disinformation, And Beyond, Rory Van Loo

Faculty Scholarship

This Article shows how consumer law, a field “derided as the law of small problems,”⁴ is more accurately viewed as important for addressing large-scale societal threats. It also offers a more integrated conceptual and institutional approach to consumer law so that the field can have a better chance of fulfilling its societal potential.

Part I of this Article outlines the importance of consumer law. It maps consumer law’s connections to some of the most pressing societal threats: climate change, public health, inequality, and disinformation. Part II focuses on consumer law’s place in the legal academy and government. Currently, important …

Comments Of The Cordell Institute For Policy In Medicine & Law At Washington University In St. Louis, Neil Richards, Woodrow Hartzog, Jordan Francis

Faculty Scholarship

The Federal Trade Commission—with its broad, independent grant of authority and statutory mandate to identify and prevent unfair and deceptive trade practices—is uniquely situated to prevent and remedy unfair and deceptive data privacy and data security practices. In an increasingly digitized world, data collection, processing, and transfer have become integral to market interactions. Our personal and commercial experiences are now mediated by powerful, information-intensive firms who hold the power to shape what consumers see, how they interact, which options are available to them, and how they make decisions. That power imbalance exposes consumers and leaves them all vulnerable. We all …

Consumer Law As An Axis Of Economic Inequality, Daniel Markovits, Barak D. Richman, Rory Van Loo

Faculty Scholarship

In the standard paradigm of consumer law, a voluntary transaction is supposed to be welfare enhancing for each of the parties involved. We challenge this foundational presumption and ask to what extent many common consumer contracts are in fact extractive despite resulting from voluntary exchanges. With inequality growing throughout the world, to a degree that threatens the stability of both the economies and governments of even the wealthiest nations, we ask this fundamental question in an effort to identify root causes of inequality and to mark some guideposts for the articles that follow. Taken together, our speculations suggest that the …

Understanding University Fee Litigation: A Few Lessons About The Perils Of Imprudence For Higher Ed Plan Sponsors, Maria O'Brien, Calvin Utter

Faculty Scholarship

Beginning in August 2016, a series of class action lawsuits were filed on behalf of participants and beneficiaries of 403(b) employee retirement plans sponsored by major American colleges and universities. These plans are regulated by the 1974 Employee Retirement Income Security Act (“ERISA”), which sets minimum standards to protect the participants and beneficiaries of voluntarily established retirement and health plans. The allegations in the several lawsuits have centered primarily around breaches of fiduciary duties by those charged with administering the plan.

These cases are all class action lawsuits brought on behalf of the participants and beneficiaries of the plans in …

Broadening Consumer Law: Competition, Protection, And Distribution, Rory Van Loo

Faculty Scholarship

Policymakers and scholars have in distributional conversations traditionally ignored consumer laws, defined as the set of consumer protection, antitrust, and entry barrier laws that govern consumer transactions. Consumer law is overlooked partly because tax law is cast as the most efficient way to redistribute. Another obstacle is that consumer law research speaks to microeconomic and siloed contexts—deceptive fees by Wells Fargo or a proposed merger between Comcast and Time Warner Cable. Even removing millions of dollars of deceptive credit card fees across the nation seems trivial compared to the trillion-dollar growth in income inequality that has sparked concern in recent …

Digital Market Perfection, Rory Van Loo

Faculty Scholarship

Google’s, Apple’s, and other companies’ automated assistants are increasingly serving as personal shoppers. These digital intermediaries will save us time by purchasing grocery items, transferring bank accounts, and subscribing to cable. The literature has only begun to hint at the paradigm shift needed to navigate the legal risks and rewards of this coming era of automated commerce. This Article begins to fill that gap first by surveying legal battles related to contract exit, data access, and deception that will determine the extent to which automated assistants are able to help consumers to search and switch, potentially bringing tremendous societal benefits. …

Technology Regulation By Default: Platforms, Privacy, And The Cfpb, Rory Van Loo

Faculty Scholarship

In the absence of a technology-focused regulator, diverse administrative agencies have been forced to develop regulatory models for governing their sphere of the data economy. These largely uncoordinated efforts offer a laboratory of regulatory experimentation on governance architecture. This symposium essay explores what the Consumer Financial Protection Bureau (CFPB) has done in its first several years to regulate financial technology (“fintech”), in the context of broader technology-related concerns identified in the literature. It begins with a survey of what the CFPB has undertaken using more traditional administrative agency tools—enforcement and rulemaking—in areas such as privacy, consumer control over data, and …

Antitrust And Intellectual Property: A Brief Introduction, Keith N. Hylton

Faculty Scholarship

Intellectual property law and antitrust have been described as conflicting bodies of law, and the reason is easy to see. Antitrust law aims to protect consumers from the consequences of monopolization. Intellectual property law seeks to enhance incentives to innovate by granting monopolies in ideas or expressions of ideas. The purpose of this chapter is to explore the purported conflict between antitrust and intellectual property. The chapter is largely descriptive, and focuses on current or developing litigation rather than historical controversies. Many of the modern examples of conflict can be attributed to problems of classification.

Regulation Of The Sharing Economy: Uber And Beyond, Jack M. Beermann

Shorter Faculty Works

On January 8, 2016, the Section held a program entitled “Regulation of the Sharing Economy: Uber and Beyond.” I served as moderator of the program, which included four excellent speakers, Nicole Benincasa, Attorney for Uber Technologies, Inc., Bernard N. Block, Managing Principal, Alvin W. Block & Associates, Chicago, Illinois, Randy May, Founder and President, Free State Foundation (and long-time active member of the Section) and Peter Mazer, General Counsel to the Metropolitan Taxicab Board of Trade and former General Counsel to the New York City Taxicab Licensing Commission.

The program began by asking general questions about regulatory issues concerning the …

New Dtca Guidance — Enough To Empower Consumers?, Christopher Robertson

Faculty Scholarship

As one of only two countries that permit direct-to-consumer advertising (DTCA) of pharmaceuticals, the United States tasks the Food and Drug Administration (FDA) with regulating that advertising to ensure that it doesn't mislead consumers. When a drug maker publishes or broadcasts a claim that its drug has benefits in a particular disease, the FDA requires it to include information on the product's risks as well. Since it's not feasible for companies to include all the important information about their products in a television ad, the FDA requires them to refer viewers to more complete information, such as that in a …

Helping Buyers Beware: The Need For Supervision Of Big Retail, Rory Van Loo

Faculty Scholarship

Since the financial crisis, consumer regulators have closely supervised sellers of credit cards and home mortgages to stamp out anticompetitive practices. Supervision programs give financial regulators ongoing access to sophisticated firms' internal data outside the litigation process. This often enables examiners to identify and correct harmful conduct more rapidly and effectively than would be possible using publicly available information and cumbersome legal tools.

Consumers spend four times more on retail goods than on financial products. The retail sector’s dominant firms — such as Amazon, Walmart, Unilever, and Kraft — employ large teams of quantitative experts armed with advanced information technologies, …

Internet Payment Blockades: Sopa And Pipa In Disguise? Or Worse?, Stacey Dogan

Shorter Faculty Works

The law of intermediary liability in intellectual property reflects a constant struggle for balance. On the one hand, rights owners frustrated by the game of whack-a-mole have good reason to look for more efficient ways to stanch the flow of infringement. While this concern is not a new one, the global reach and decentralization of the Internet have exacerbated it. On the flipside, consumers, technology developers, and others fret about the impact of broad liability: it can impede speech, limit competition, and impose a drag on economic sectors with only a peripheral relationship to infringement. As the Supreme Court put …

The Law And Economics Of Products Liability, Keith N. Hylton

Faculty Scholarship

This paper presents a largely positive analysis of products liability law, in the sense that it aims to predict the incentive effects and the welfare consequences of the law, with close regard to its specific legal tests and the real-world constraints that impinge on these tests. The other major part of this paper is a normative assessment of the parts of products liability law that should be reformed. In contrast with the prevailing law and economics literature suggesting that products liability law reduces social welfare, I argue that the law probably improves social welfare, though it is in need of …

First Amendment Protection For Union Appeals To Consumers, Michael C. Harper

Faculty Scholarship

This article explains why decisions of the National Labor Relations Board under President Obama holding non-picketing secondary appeals to consumers not to be illegal under the National Labor Relations Act were necessary under a 1988 decision of the Supreme Court, Edward J. DeBartolo Corp. v. Florida Gulf Coast Building & Construction Trades Council. The article also explains why both the Supreme Court decision and the Board’s recent decisions were compelled by the first amendment and could not be based on the language of § 8(b)(4)(ii)(B) of the National Labor Relations Act as interpreted by the Court in other cases. The …

Trademark Dilution And Corporate Personhood, Stacey Dogan

Shorter Faculty Works

It’s become almost passé to decry our federal trademark dilution laws. The laws – first passed in 1995 and amended in 2006 – protect “famous trademarks” against uses that are likely to dilute their distinctiveness, without regard to any confusion among consumers or competition between the parties. Early critics warned that passage of the anti-dilution statute marked a turning point in trademark law: by giving famous trademark holders rights against even non-confusing uses of their marks, the law created “property”-like rights in trademarks. The initial commentary on the statute focused mainly on the costs associated with this increasingly absolutist approach …

The Consumer Indebtedness Crisis: Law School Clinics As Laboratories For Generating Effective Legal Responses, Peggy Maisel, Natalie Roman

Faculty Scholarship

For the legal system to operate effectively, it must address problems arising from the absence of needed laws, or, if enacted, of laws that have been drafted poorly or are not being implemented in a fair and just manner. Since law schools are generally part of a larger university community, they are uniquely placed to serve as laboratories to find solutions to such problems, perhaps nowhere more so than in their legal clinics. The latter have in fact often played the role of legal innovators, but their contributions to the law and therefore to society at large have been little …

Brand Or Anti-Brand?, Stacey Dogan

Shorter Faculty Works

How many law review articles begin with a scene from Wayne’s World? For Sonia Katyal, such an opening is par for the course. Since she entered the scene a decade ago, Katyal’s scholarship has celebrated irreverence, and examined the ways in which the law tolerates, enables, and often discourages commentary on dominant culture, icons, and in this case, brands. This essay – written for a symposium on advertising and the law at SUNY Buffalo Law School – continues the Katyal tradition.

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.

The Great Bailout Of 2008-09, Frederick Tung

Faculty Scholarship

My task today is to talk about the financial crisis. I only have a short time to talk, so rather than try to give you a comprehensive analysis of events, I'm going to offer some of my own idiosyncratic takes on what has been happening. In addition, I will introduce my own small reform proposal for regulating bank risk taking. So, I'll give you a little bit of news, a little bit of weather, a little bit of everything.

Where are we now? Let us begin with a statement Henry Paulson made six months ago while Bear Steams was getting …

Walmart's Other Woman Problem: Sprawl And Work-Family Balancing, Katharine B. Silbaugh

Faculty Scholarship

Wal-Mart is often said to be bad for its workers, including those workers in its production chain in developing countries, and good for its consumers, most of whom are women. Most people argue that its consumers gain from low prices. This brief essay argues that consumers absorb a share of the costs of Wal-Mart's low prices. Contrary to intuition, Wal-Mart may increase significantly the financial and time pressures on its shoppers, the majority of whom can ill-afford increases in either. Most small retail is sited to take advantage of travel routines people have already established to meet their residential and …

Consumer Law As Tax Alternative, Rory Van Loo

Faculty Scholarship

Policymakers and scholars have in distributional conversations traditionally ignored consumer laws. Tax law dominates distributional conversations partly because legal rules are seen as less efficient and partly because consumer law research speaks to narrow and siloed contexts. Even millions of dollars in reduced credit card fees seem trivial compared to the trillion-dollar growth in income inequality that has sparked concern in recent decades. This Article is the first to synthesize the fragmented studies quantifying inefficiently higher consumer prices across diverse markets — called overcharge. These studies indicate that laws reducing overcharge could make a substantial reduction in inequality. Moreover, this …

Trusting And Non-Trusting On The Internet, Tamar Frankel

Faculty Scholarship

The Puzzle: The Internet is a wonderful innovation, allowing people around the world to communicate, trade, and obtain services. Convenient and rich in choices and opportunities, the Internet is tremendously attractive to buyers. Naturally, businesses are flocking to the Internet. The warning has been sounded that those who do not stake a claim in this incredible new communication medium will be left behind to perish. Yet, with all the enthusiasm, many buyers hesitate to take a serious plunge. Businesses are told repeatedly that they must obtain their customers' trust, yet find it more difficult to gain this trust in cyberspace …

What Can Be Done About Stock Market Volatility, Tamar Frankel

Faculty Scholarship

Volatility is as old as the financial markets. The bull market of 1986 and the crash that followed in 1987 were but the latest of periodic market gyrations that started with the South Sea Bubble and the Lombard Street run on commercial paper and have continued ever since.' Volatility in the financial markets would not be very important if market activity simply mirrored economic activity. Volatility would be much less important if the markets moved independently of the economy. But if we believe, as I do, that the markets and the economy are interdependent, and that their volatility is generally …