Unfairness, Reconstructed

61 Pages Posted: 14 Aug 2023 Last revised: 28 Feb 2024

See all articles by Luke Herrine

Luke Herrine

University of Alabama - School of Law

Date Written: January 31, 2024

Abstract

A paradigm shift is afoot in consumer protection. For four decades, a bipartisan bloc of bureaucrats has seen the purpose of consumer protection as promoting informed consumer choice or “consumer sovereignty.” The idea was that informed consumers in competitive markets would protect themselves merely by choosing between sellers. Ensuring access to information would then shore up markets’ self-correcting tendencies without requiring moral judgment. In accordance with this vision, the Federal Trade Commission applied a light touch: prioritizing piecemeal enforcement actions over sector-wide regulation, fly-by-night schemes over big businesses’ abuses, and disclosures over any other remedy. Doctrinally, the Commission almost exclusively used its power to root out deceptive practices while neglecting its authority over unfair practices.

In the past few years, by contrast, the Commission—now joined by the Consumer Financial Protection Bureau—has prioritized sector-wide regulation, enforcement sweeps, and strategic cases against market leaders. It has made ample use of its unfair practices authority to create new rules for add-on fees, manipulative online interfaces, corporate surveillance, unequal treatment, worker misclassification. It has shifted its preferred remedies from disclosure and education to prohibitions and mandates. And it has justified its actions not in terms of informed choice or efficiency but in terms of values like protecting the vulnerable, preventing harassment, preserving privacy, and correcting for unjust inequalities.

This Article situates the shift both historically and theoretically. Historically, it argues that consumer sovereignty lost ground after the Global Financial Crisis and with controversies over Big Tech. Theoretically, it argues that the consumer sovereignty framework relied on a problematic commitment to an unattainable market ideal and that the paradigm that is emerging in its place is properly committed to correcting for power asymmetries in irredeemably imperfect markets. I call the new paradigm an “anti-domination framework” and defend it.

Keywords: consumer law, consumer protection, federal trade commission, consumer financial protection bureau, law and economics, law and political economy, administrative law, contracts

Suggested Citation

Herrine, Luke, Unfairness, Reconstructed (January 31, 2024). U of Alabama Legal Studies Research Paper No. 4530307, Yale Journal on Regulation, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4530307 or http://dx.doi.org/10.2139/ssrn.4530307

Luke Herrine (Contact Author)

University of Alabama - School of Law ( email )

P.O. Box 870382
Tuscaloosa, AL 35487
United States

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