The Consent Burden in Consumer and Digital Markets

Abstract

Consent has become central to the governance of consumer markets in general and digital markets in particular. But consumer consent is arguably empty, and it enables and legitimizes digital surveillance and other consumer exploitations. This Article argues that traditional law-and-economics views on consent hide a crucial aspect: consent shifts considerable burdens — to collect and process information, to make informed decisions, and eventually to be liable for adverse results — to individuals and away from firms. This burden-shifting technique is deployed under the guise of empowering individuals to control their lives. Ironically, the use of consent (either by market mechanisms or by regulatory regimes) often has the opposite effect of disempowering and burdening individuals, leaving them with little control or recourse. Consequently, what consent mechanisms often achieve is delegating unchecked regulatory powers to firms.

This Article introduces the consent burden, a novel framework for analyzing consumer and digital markets, providing a comprehensive account of both the ex-ante and the ex-post burdens that consent mechanisms impose on individuals. The consent burden framework accounts for informational and decisional burdens, as well as for questions of liability and rights assertion through the courts. After laying the conceptual foundations, this Article finds that the consent burden can be used as a single metric for analyzing the rights/power allocation in the market. When the consent burden is high, firms are likely too powerful and the regulator has likely intervened too little or ineffectively (even if it seems otherwise).

This Article then draws an analogy between the consent burden imposed on individuals and the regulatory burden imposed on firms. It calls regulators to account for the consent burden when designing regulation, similar to how they routinely account for the regulatory burden. Finally, this Article proposes a diagnostic process to evaluate the consent burden of a proposed regulatory regime. Accounting for the consent burden will increase the effectiveness of regulation and will benefit consumers.

Keywords: Consent, Consumer Protection, Privacy, Digital Markets, Regulation, Information Economy, Law and Economics