Consumer Protection Enforcement Research Articles

The Good National Judge: How Justice Reforms under the Conditionality of NextGenerationEU may Affect Consumer Protection Enforcement

The Good National Judge: How Justice Reforms under the Conditionality of NextGenerationEU may Affect Consumer Protection Enforcement

The Good National Judge: How Justice Reforms under the Conditionality of NextGenerationEU may Affect Consumer Protection Enforcement

The Good National Judge: How Justice Reforms under the Conditionality of NextGenerationEU may Affect Consumer Protection Enforcement

Digitalization and consumer protection enforcement

The era of “new consumer protection” is marked by maximum harmonization rather minimum harmonization, (more) policy-based approach, legislation driven by the fast-emerging ecosystem of digital platforms, the strengthening of collective remedy and agency enforcement, and more cooperation between Member State regulatory bodies and EU Commission. All of the above phenomenae emphasize changing directions and methods of consumer protection enforcement: digital platforms present a unique set of issues that trigger different policy solutions, mostly based on the findings of behavioral economics. The practices of digital platforms usually affect consumers in more than one Member State, thus EU-wide cooperation is more likely to happen vis-à-vis digital platforms than other traders. Individual remedies against digital platforms – due to their immense size – result in little change. The European Consumer Protection Cooperation Network is highly likely to open cases with regards to digital platforms. In Hungarian law, EU-wide coordination complements an already existing rich practice of the Hungarian Competition Authority in the field of unfair commercial practices. In the future, where quite possibly, the number of cases against digital platforms will grow, the issue of cooperation will grow even more important.

Consumer protection enforcement law characteristics on civil law aspects in Indonesia

Law enforcement on consumer protection reflects the norms or rules of consumer protection law that apply in the community to be obeyed. The use of law enforcement instruments in consumer protection is a civil lawsuit that can be made by consumers, either individually or in groups, non-governmental organizations and the government. Consumer protection is something that is very important, because basically all humans are consumers. This consumer protection has been regulated in Law Number 8 of 1999 concerning Consumer Protection (hereinafter referred to as UUPK). The purpose of this law is to balance the rights and obligations of consumers and actors so as to provide protection to both parties, even though the interests of consumers and business actors are different. This difference in interests can trigger disputes between consumers and business actors. This consumer protection law enforcement can be done in court or out of court. Law enforcement on consumer protection is currently weak and tends to weaken. This can be seen from the number of complaints, complaints and consumer disputes submitted through social media, the voices of readers and those that go to BPSK, BPKN, LPKSM and YLKI, but very few get to the court process.

Protecting Consumer Protection: Filling the Federal Enforcement Gap

Since 2014, when a first-of-its-kind empirical study looked at how public enforcers use their authority under UDAP laws, the enforcement landscape has changed. Most notably, the Trump Administration has weakened enforcement on the federal level. In the wake of this political shift, many state enforcers rushed to fill the gap left by weak federal enforcement. At the same time, the state enforcers themselves experienced changes both internal (including changes to budgets and stated policy priorities) and external (electoral changes regarding state Attorneys General, changes to statutory authority, and other changes governing the enforcer’s authority). This article presents findings from a follow-up study examining the public UDAP enforcement landscape in 2018. The principal finding from 2018 is that states employed substantially the same strategies toward UDAP enforcement as they did in 2014. This finding validates the central observation of both years’ studies of state UDAP enforcement: states can be characterized by distinct strategies of consumer protection enforcement. This information alone offers insight into the remarkable stability of state UDAP enforcement, even across varied strategies and a changing landscape. Other findings also begin to shed light on how states might react to extreme changes in enforcement on the federal level. For example, even though six states have made public statements backed by concrete actions to attempt to fill an enforcement gap left by the absence of federal action, state enforcement case volume was up among all states. Public compensation, however, was down among all types of enforcement actions in 2018. Finally, comparisons of enforcement case volumes and strategy across states that experienced other changes over the time period -- changes in leadership and statutory authority, for example -- mirrored the overall trend of an increase in enforcement coupled with a general strategic stability. Strategies as a whole do not seem closely aligned with partisan politics. This study creates a needed point of comparison to the 2014 data, allowing stakeholders to ask deeper questions about how public enforcers should wield their discretion and authority to resolve consumer protection cases. With debt levels in America at an all-time high, and federal enforcement of consumer law at an all-time low, research-based action is urgently needed to sharpen our understanding of the role and potential effectiveness of institutions tasked with protecting consumers from fraudulent lending schemes and oppressive debt collection strategies as well as the myriad other types of consumer scams that lead Americans toward more debt. The data here give state officials and state-based reformers the information needed to maximize enforcement in a way that makes consumers’ lives better.

ICLE Comments, The Current Landscape of Competition and Consumer Protection Law and Policy

These comments were submitted to the FTC as part of its hearings on “Competition and Consumer Protection in the 21st Century.” As part of our comments, we note the timeliness of the hearings, given that, despite the vast social benefits generated by companies operating in the digital economy, the ongoing economic transformation has stoked fears amongst members of the general public, the press, and policymakers. This transformation has led to calls for interventionist policies such as heightened antitrust enforcement, sector-specific regulation, and direct intervention against industry concentration. We further note that there is insufficient evidence and, at best, ambivalent theory to support any of these proposed policies—and in the absence of a strong basis for adopting them, the proposed policies would do more harm than good. Among other things, economies of scale, economies of scope, net- work effects, and the like may bring about larger firms and more concentrated markets along with considerable consumer benefits. And new markets necessarily imply the consolidation of some firms and the exit of others, as competitors vie to come up with the winning paradigm. Against the backdrop of this evolutionary process, it is critical that authorities avoid knee-jerk reactions that may impair the long-term welfare of consumers and firms alike. Our comment reviews some of the important findings which law and economics scholarship can bring to bear on competition and consumer protection enforcement in this space.

The Dynamic Duo of Consumer Protection: State and Private Enforcement of Unfair and Deceptive Trade Practices Laws

This article focuses on the critical importance to consumer protection of the “dynamic duo” of state and private enforcement mechanisms provided in state unfair and deceptive acts or practices (UDAP) statutes. The article begins by chronicling the origins of these state laws, rooted in a cooperative effort between the Federal Trade Commission and state governments in the late 1960’s and early 1970’s. The two goals of the state laws are: (1) expanding consumer protection enforcement out to states and individuals, and (2) providing consumers with more adequate remedies for relatively small individual injuries from marketplace practices. The evolution of more aggressive state attorney general litigation, such as multi-state lawsuits and suits against large companies, led to some federal/state tensions over the years, but mostly the federal and state consumer protection missions have been in harmony. Private enforcement is also evaluated, including the public benefits of individual or class actions as deterrents to future unfair or deceptive practices, as well as the individual benefits to consumers who can obtain meaningful remedies. The article rebuts criticisms of the private right of action for state UDAP laws, but also endorses some limited judicial and legislative reforms that can both leave consumers adequately protected while shielding businesses from unwarranted litigation. The article concludes that both halves of the “dynamic duo,” i.e., state and private enforcement of state UDAP laws, are needed to provide the optimum level of consumer protection. This article has been published at 81 Antitrust Law Journal 911 (2017).

Effect of Financial Consumer Protection Enforcement on Financial Product Investment in South Korean Market

Effect of Financial Consumer Protection Enforcement on Financial Product Investment in South Korean Market

Humility, Institutional Constraints & Economic Rigor: Limiting the FTC's Consumer Protection Discretion

It is in the realm of new technology that many of the FTC’s most significant recent cases have arisen and such cases particularly raise concerns about the scope of regulation and limits on the agency's discretion. Facing novel data security questions, the agency has pushed the bounds of its authority over unfair and deceptive acts and practices (UDAP) to constrain firms trying to experiment and adapt in the face of developing technology. Similarly, by expressing myriad concerns about business methods and practices in high-tech firms — among them Intel, N-Data, Twitter, Google, Facebook Apple and Amazon — and investigating issues ranging from privacy to search engine design to patent enforcement to integrated circuit fabrication, the Commission has pushed the bounds of its Section 5 authority. The FTC must always weigh the costs of intervention (and the costs of getting it wrong) against the costs of doing nothing. But what, and who, will limit the discretion of a majority of FTC Commissioners in assessing these trade-offs? In technology the question becomes, how should the FTC regulate technology? What’s the right mix of the certainty businesses need and the flexibility technological progress demands? One thing is certain: a top-down, administrative regulatory model of regulation is ill-suited for technology. The most important, most welfare-enhancing reform the FTC could undertake is to better incorporate sound economic- and evidence-based analysis in both its substantive decisions as well as in its process. While the FTC has a strong tradition of economics in its antitrust decision-making, its record in using economics in other areas is mixed (or at least opaque). Meanwhile, a review of some recent decisions at the agency suggests that the Commission is inconsistent in its application of economic principles. In this paper I discuss several important aspects of the FTC’s process and substantive decision-making, particularly those that bear on its regulation of technology. In doing so, I assess the contribution (or lack thereof) of proper economic analysis to the Commission’s decisions and how it has contributed and can better contribute to the Commission’s goal of promoting consumer welfare. The paper draws significantly on Commissioner Josh Wright’s decision-making (as well as some of that of fellow Commissioner Maureen Ohlhausen) to highlight the role of economics at the FTC. Wright’s approach has often been adopted by the Commission (most notably under economically-minded past Chairmen like Tim Muris and Bill Kovacic). But, as I will discuss, there are some glaring exceptions, particularly in the FTC’s consumer protection enforcement practices.

Indictments Do Not a Common Law Make: A Critical Look at the FTCCs Consumer Protection 'Case Law'

FTC Commissioners have increasingly described the Commission’s settlements of privacy, data security and other IT-related consumer protection enforcement actions as a “common law.” Dan Solove and Woody Hartzog defend this approach in their article “The FTC and the New Common Law of Privacy,” and in another forthcoming paper. This paper examines enforcement actions brought by the FTC dating back to the mid-90s and asks a series of questions: How did the FTC analyze the elements of its deception and unfairness claims? How does that analysis compare with what the FTC’s policy statements on both seem to require, with the level of analysis typically performed by courts, and with the FTC’s own analysis in the few cases where it has actually appeared in court, primarily to seek preliminary injunctions? Has the FTC fulfilled the promise it made to Congress in the Unfairness Policy Statement that the “meaning and application” of unfairness (deception) would emerge through “the gradual process of judicial inclusion and exclusion,” and that the Commission would, in “identifying unfair trade practices,” operate “subject to judicial review? In short: does the FTC’s approach really resemble a common law process?Thus far, my research strongly indicates that the FTC has done little to develop the core elements of either deception or unfairness outside of traditional marketing contexts. This is chiefly because companies so rarely challenge enforcement actions and when the Commission settles an enforcement action, Section 5(b) requires only that (a) the Commission has “reason to believe” a violation of law has occurred and (b) believes that opening the enforcement action would be in the public interest. Section 5(b) does not require any justification or process for settling a case unless the Commission seeks a monetary penalty (e.g., for violations of existing consent decrees). Thus, the settlements cited by the Commission as “guidance” do not even, by their own terms, purport to reach the merits of underlying issues and involve significantly less analysis than in judicial motions for preliminary injunctions. I survey major doctrinal leaps made with little analysis other than the occasional dissent. Most notably, the FTC has pushed the boundaries of deception by (1) unquestioningly extending the strong (and logical) presumption that marketing statements are material to non-marketing statements such as privacy policies and help pages and (2) by policing business-to-business conduct without assessing whether the greater sophistication of businesses makes it “reasonable” for them not to exercise greater caution or self-help. Even more troublingly, the Commission offers little (if anything) more than cursory assertions as to the elements of unfairness, which the Commission is applying more broadly. Most notably, the Commission has failed to articulate a coherent methodology for weighing costs and benefits of ambiguous practices. In both areas, the Commission has imposed the same boilerplate conditions in its consent decrees, with no evident tailoring of remedies to harms. The ultimate purpose of the paper is to consider a range of changes to Section 5 or FTC practice that could make the FTC’s approach more like a common law — and ensure that the FTC spends its limited enforcement resources on interventions that will actually benefit consumers. This might include having litigate in Federal court, better explaining its analyses, a greater role for individual Commissioners and the Bureau of Economics in forcing doctrinal analysis, and removing structural biases that encourage companies to settle rather than litigating. Litigation, after all, is the fountainhead of true common law.

The Impact of EU Norms and Policies on Consumer Protection Enforcement in Serbia

Pursuant to its 2008 Stabilization and Association Agreement governing the process of EU integration, Serbia is obliged to align its consumer protection standards (including those related to enforcement) with those of the EU. This article considers the overall approach to enforcement of consumer law in Serbia, focussing in particular on the extent to which EU enforcement principles have been successfully exported to Serbia and whether the goals of EU consumer policy have been achieved. It argues that the incorporation of EU norms has brought fundamental changes to Serbian enforcement mechanisms at a formal level, such as in relation to mediation processes as well as the introduction of injunctions for the protection of collective consumer interests. In practice, however, the impact of this incorporation is quite limited. A number of factors that restrict the practical effectiveness of the mediation processes and injunctions required by EU law are explored in the article, including weak sanctions, excessive reliance on poorly resourced consumer organizations, absence of a business culture of compliance or a sophisticated and determined consumer protection enforcement culture sufficiently grounded in expertise, as well as an overarching political, legislative, and institutional instability. These factors also undermine the general aim of EU policy to achieve effective consumer protection enforcement in the Serbian context.

The Politics of Consumer Protection: Explaining State Attorney General Participation in Multi-State Lawsuits

In the past 20 years, state attorneys general have reinvented the enforcement of consumer protection regulations. Prosecuting businesses through multi-state lawsuits has the effect of enforcing consumer protection laws at the national level. The participation of states in these lawsuits varies quite dramatically across states, yet little research has been done to explain these differences in consumer protection enforcement. Because state attorneys general are elected in 43 states, the electorate’s ideology and the state’s socioeconomic culture should help explain these discrepancies. A pooled time-series analysis of participation rates from 1989-1998 provides support for these hypotheses.