Framework For Consumer Protection Research Articles

A Law and Economics Approach to Privacy Policy Misstatements: Considering the Need for a Cost-Benefits Analysis in the FTC's Deception Framework

It is said that today’s world is shaped by technology and fueled by information. Technological innovations such as mobile phones, audio and video recording devices, and computers, as well as the Internet and the rise of Big Data, have revolutionized our ability to capture, analyze, and share information. Further, information is undoubtedly critical to the economy. When readily available, consumer information enables businesses to “deliver the right products and services to the right customers, at the right time, more effectively and at a lower cost.” It also enhances customer convenience, improves service quality, and allows businesses to target those likely to be interested in the goods and services they offer, reducing waste and the need for mass advertising. Indeed, information about consumer needs and preferences is said to be “the cornerstone of any system that allocates goods and services within an economy.” As more information about consumers becomes available, the economy can more accurately and efficiently meet their needs and preferences.But many privacy advocates argue that the technological revolution that started in the twentieth century and continues today has caused a rapid erosion of personal privacy. Without a doubt, more personal information is readily available today than at any other point in mankind’s history. One proposal to stop this erosion is to stop the avalanche of technology and commercial opportunity responsible for it by intervening in the market for privacy by increasing the cost of consuming other people’s privacy and lowering the profits of voluntarily giving up one’s own privacy. Others argue for a less paternalistic approach, such as an increased emphasis on privacy-enabling technologies like encryption or a greater effort to obtain prior informed consent from consumers. Irrespective of the framing of the issue and the various proposed solutions, most privacy scholars agree that “the collection and use of personal data by businesses and government is spinning out of control.” While merchants that collect, use, store, and share consumer information are not specifically regulated under federal law, they are nevertheless regulated by the Federal Trade Commission (FTC), which has power under Section 5 of the Federal Trade Commission Act to sanction businesses that engage in deceptive or unfair acts or practices in relation to their collection and use of consumer data. But some have called into question the FTC’s method for determining whether to bring a Section 5 enforcement action, arguing for “a deeper integration of economics and cost-benefit analysis” into the FTC’s consumer protection framework. They argue that “[a]n economic approach to privacy regulation [should be] guided by the tradeoff between the consumer welfare benefits of new and enhanced products and services against the potential harm to consumers, both of which arise from the same free flow and exchange of data.” This Essay examines calls for the integration of economic considerations into the FTC’s Section 5 framework. It does so by applying law and economics analysis to the FTC’s recent enforcement action against retail analytics provider Nomi Technologies for a privacy policy misstatement. In Part II, the Essay sets the stage by providing a brief summary of the current state of consumer privacy law and explaining how the FTC became the predominant consumer privacy watchdog in the United States. Part III cites calls for increased economic considerations to temper the FTC’s power and distinguishes the two means through which the FTC may sanction privacy violations — unfairness and deception. Part IV discusses Nomi’s data collection practices and its settlement with the FTC. The Essay proceeds to the law and economics analysis in Part V, using both rational and behavioral models to determine whether the FTC’s deception framework produces economically efficient outcomes in the context of privacy policy misstatements and to recommend efficiency-promoting improvements to that framework.

Online Consumer Protection in E-Commerce Transactions in Nigeria: An Analysis

This paper will seek to examine the current Consumer Protection legislation in place for online transactions in Nigeria, it will focus on online consumer protection available in Nigeria and analyse its adequacy or otherwise in today’s online commercial world. The paper will focus on issues such as terms and conditions in e-commerce contracts, quality of goods and services provided, advertising standards, after-sales services, Data Protection, information requirements for providers, contract formation, withdrawal rights and delivery/performance of contracts, enforcement and redress mechanisms etc. This is with a view to making recommendations and suggestions, where necessary, with regards to steps that may be taken into establish an adequate legislative framework for consumer protection in e-commerce in Nigeria. The paper will also examine proposed Consumer Protection legislation currently being considered by the Nigerian Legislature, to determine whether or not they are adequate to regulate e-commerce in the current global framework/context, with particular comparative reference to the position in Europe.

Gaps and Challenges in the Enforcement Framework for Consumer Protection in Ethiopia

Tessema Elias  Abstract The effectiveness of consumer protection in a market economy is, inter alia, determined by the quality of the enforcement framework of competition law and consumer protection law. Despite Ethiopia’s current efforts to bring about an effective consumer protection regime, the country has been experiencing various consumer abuses. This article assesses the gaps and challenges in the existing enforcement schemes for consumer protection in Ethiopia. Common features and practices of effective enforcement strategies and institutional designs for consumer protection, and experiences from some countries based on their success and relevance to Ethiopia are used as benchmarks. It is argued that there is failure to decentralize consumer protection and failure to recognize representation of major stakeholders in the Consumer Protection Authority. Moreover, there is lack of extensive pre-intervention study, failure to give priority to areas of greater consumer risks and failure to take measures against anti-competitive practices. These major gaps and challenges call for empowering and enabling enforcement institutions so that they can work more on the promotion of competition and meanwhile take legal measures against anticompetitive practices.

European Online Marketplace – New Measures for Consumer Protection against “Old Conflict of Laws Rules”

The paper aims at discussing the rationale for protecting consumers under the new directive on consumer rights (CRD) and its relation to conflict of law rules under the Regulation on the law applicable to contractual obligations (Rome I).The author is of the opinion the newly adopted legal framework for consumer protection under the directive on consumer rights seems to be more predictable especially in terms of supporting consumers with more mandatory information before the conclusion of a contract with a professional as well as a single 14 day withdrawal period for all Member States. However, the level of consumer protection in the purchase of digital content is insufficient and from the perspective of conflict of laws rules for consumer contracts under Rome I, a consumer who actively makes a purchase from a professional from another Member State or a third country cannot expect the special protective rules envisaged in the regime under CRD and Rome I to be applied by default; rather, the general rules come into play.

A Theory for Regulation of Essential Products

This essay introduces an innovative framework for consumer protection, based on consumers’ basic needs. Current contract law is based on a binary model: contracts which lack consent are considered void and are not enforceable under the unconscionability doctrine. Yet, voluntariness is not binary. Rather, voluntariness is a hierarchical continuum reflecting human needs. Certain products are purchased because the consumer has to have them, while other products are purchased as a discretionary consumer choice. Current law does not make the distinction between essential and non-essential markets. Consumers of luxuries and consumers of essentials are considered equal, and receive similar legal protection under the contractual framework of the consumer transaction. This essay offers a theory of essential markets and their regulation. The essay surveys the behavioral literature discussing human needs and the distinction between essentials and luxuries, and applies the needs-based theory to consumption, creating a pyramid of markets following Maslow’s hierarchy of needs. The essay identifies the determinants of market essentiality, including a moral baseline of consumption; lack of good substitutes and inability to decline purchase; and time constraints creating difficulty to defer purchase. The continuum of market essentiality is then demonstrated using four examples, including electricity for heating, infant formula, broadband services, and a violin. The essay argues that essential needs-based consumption induces a behavioral market failure, where consumers' decision-making process is particularly vulnerable and distorts sellers' incentives towards a sub-optimal equilibrium. Markets of essentials tend toward failure of demand, due to consumers’ bounded voluntariness and lower probability of informed choice. Accordingly, sellers in markets of essentials have higher incentives for collusion and lower incentives for price competition and for investment in product quality. Thus, the likelihood of market failure increases with the essentiality of the product: the more basic the underlying need, the higher the probability for market failure. The difficulty of regulators to tell which markets are essential is addressed. The essay suggests two methods for assessment of essentiality - the first, through political assessment, and the second, through analysis of market data documenting elasticity of demand for popular product categories. Low elasticity of demand for popular product categories is proposed as a market signal for consumers’ bounded voluntariness and for product essentiality. The normative implications of this structural division of markets are discussed and initial policy guidelines suggested. Essentiality and its tendency to create a behavioral market failure implies that consumer law should be structured with a hierarchy of rights, similar to constitutional or international human rights laws. Essential products should be subject to a higher degree of paternalism compared with non-essentials.

Islamic Finance, Consumer Protection, and Financial Stability

Consumer protection and financial literacy are essential pillars of a well functioning and stable financial system. As the global financial crisis demonstrated, inadequate attention to consumer protection and financial literacy can lead to financial instability. Though Shari’ah principles provide a strong foundation for consumer protection, the principles alone cannot provide adequate protection because not all providers are guided by ethical precepts and the practices have deviated from the principles. To safeguard the stability of the Islamic finance industry, consumer protection frameworks that cater to the specifics of Islamic financial products should be an integral part of regulatory frameworks.

Islamic Finance, Consumer Protection, and Financial Stability

Consumer protection and financial literacy are essential pillars of a well functioning and stable financial system. As the global financial crisis demonstrated, inadequate attention to consumer protection and financial literacy can lead to financial instability. Though Shari’ah principles provide a strong foundation for consumer protection, the principles alone cannot provide adequate protection because not all providers are guided by ethical precepts and the practices have deviated from the principles. To safeguard the stability of the Islamic finance industry, consumer protection frameworks that cater to the specifics of Islamic financial products should be an integral part of regulatory frameworks.

Comparative Study of Consumer Protection in India as Per UN Guidelines

This paper attempts to present the state of affairs of consumer protection in India by inspecting the current status with respect to UN guidelines for consumer protection. The paper throws light on the present scenario by conferring some data and headlining the problems. It inspects that the legal and policy framework in India is adequately good as per the measures stated by UN guidelines (Consumers International), but when it comes to implementation, the scenario is not up to the mark. It concludes with some recommendations that might further improve the consumer protection in India. I. Objective: The objective of this paper is to present the plight of Consumer Protection Act by analysing its current status with reference to Consumers International or as per UN guidelines. It states the major deviations between the consumer protection framework and its application, their drawbacks and the reasons behind it. It also highlights the need of Consumer Education and the urgency of initiating the Consumer Movements to combat consumer exploitation. The upcoming concept of industrialisation coupled with globalisation, liberalisation across the nations has empowered the consumers to realise their role in governance and society. An analysis of marketing management has made it clear that consumer is the king pin of the market. The producer should produce goods keeping in mind the requirements of the consumer and satisfy the consumer needs. In a developing country like India where the prevalence of poverty and unemployment is very high and level of literacy is very low, because of which people have to go through bulk of problems, notably in consumer related issues. Unlike in the developed world, consumer such countries lack in promotion of development process. As we all know, the basic purpose of economic planning is to allocate resources for maximum satisfaction of consumer needs. Ultimately the goods and services produced in any economy are meant for the king of the market i.e. the consumer. In a rational economy, there is this logical, political, and moral force in the proposal that the consumers themselves should have the right to take and make decisions for fulfilling their needs with wise use of resources being allocated. Realising this, the international organisation of consumer unions, now known as Consumers International took the action and under its consistent persuasion, the UN adopted a set of guidelines for the Consumer Protection on April 9, 1985 which were amended in 1999. These guidelines address the consumers keeping in view their needs and interest worldwide by promoting consumer protection and administer the legal framework for government stressing on development and newly independent countries by embellishing and strengthening consumer protection policies and legislation. Consumer protection is very wide. It includes various rights and various remedies which are available to consumers.

Consumer Protection in Pakistan from Anti-Competitive Practices A Way Forward

This article has taken into account the origin of consumer protection legislations and the history of consumer protection laws in light of the United Nations Guidelines for Consumer Protection. In addition the current state of available forums to the consumers for redress of their issues has also critically been examined. After critically examining the existing legal framework for consumer protection in Pakistan and the administrative and judicial forums and the effectiveness of the remedies available, some recommendations have been given in order to strengthen the consumer protection in Pakistan and tackle the existing issues.

An Assessment of Consumer Protection and Consumer Empowerment in Costa Rica

The present exploratory study aims to describe and assess Costa Rica’s regime for protecting and empowering consumers. As the general framework, this study used research conducted in the USA, in Europe—specifically studies conducted by the Organization for Economic Co-operation and Development (OECD) partners—and studies sponsored by the European Union (EU) in Central America. This paper, however, is not intended to provide an exhaustive analysis or to answer all questions and issues related to consumer protection in Costa Rica; rather, it is to identify the main components of the consumer protection framework, its strategies, consumer redress mechanisms, remedies, and consumer protection challenges faced by the country. The last section outlines a conclusion and presents recommendations for improvement.

Regulatory Framework for Land-Use and Consumer Protection on Inland Water Resources Towards Sustainable Development

Regulatory Framework for Land-Use and Consumer Protection on Inland Water Resources Towards Sustainable Development

Fundamental Consumer Rights Under the Consumer Protection Act 68 of 2008: A Critical Overview and Analysis

South Africa was in need of a comprehensive framework of legislation, policies and government authorities to regulate consumer-supplier interaction. The Consumer Protection Act 68 of 2008, which was signed by the President of the Republic of South Africa on 29 April 2009 and published in the Government Gazette on 29 April 2009, now provides an extensive framework for consumer protection and aims to develop, enhance and protect the rights of consumers and to eliminate unethical suppliers and improper business practices. Certain areas of the common law regarding consumer rights have been codified by the Act and certain unfair business practices that were previously unregulated are now governed by the Act. The Act has a wide field of application. It applies to every transaction occurring within South Africa for the supply of goods or services or the promotion of goods or services and the goods or services themselves, unless the transaction is exempted from the application of the Act. The Act also specifically regulates aspects of franchise agreements. In terms of the Act, consumers obtain several new rights and some existing rights are broadened and reinforced. These rights are: the right to equality in the consumer market; privacy; choice; disclosure and information; fair and responsible marketing; fair and honest dealing; fair, just and reasonable terms and conditions; and fair value, good quality and safety. The last right in terms of the Act deals with a supplier's accountability to consumers. The authors critically analyse and discuss these rights. It is clear that the Act is written in favour of the consumer. Various provisions of the Act make inroads into the common-law position to strengthen the position of the consumer vis-a-vis the supplier and suppliers are undoubtedly facing an onerous task to prepare to comply, and eventually attempt to comply, with the Act. Although the Act has its own interpretation clause, which provides that it must be interpreted in a manner that gives effect to the purposes of the Act, the Act poses many uncertainties and interpretational and practical challenges. Many questions are therefore raised, some of which remain unanswered. These questions illustrate some of the uncertainties concerning the scope and possible interpretation of the fundamental consumer rights.

The right to be heard and to be understood: a conceptual framework for consumer protection in emerging economies

AbstractIn many emerging economies and developing countries, comprising consumers from different cultures and with varying degrees of sophistication (knowledge and skill) concerning consumer protection, the promotion of consumers' rights to develop a consumer‐oriented culture remains a very big challenge. One way of protecting the consumer, especially the consumer that has not been fully socialized to execute informed decisions when purchasing expensive durables, is by establishing a redress environment that would ensure fair redress as well as an understanding and appreciation of the consumer. Manufacturers and retailers are often not aware of the performance failures that consumers experience concerning their products because many people do not communicate their dissatisfactions to them. However, unless and until manufacturers and retailers fully comprehend their customers' complaint behaviour, their reasons for engaging in specific complaint behaviour and the reasoning (cognitive processes) and emotional processes behind their behaviour, they will not recognize the link between complaint handling and customer loyalty and profits.The purpose of this paper was to develop a theoretical conceptual framework that would enable consumer scientists, consumer consultants, consumer behaviour researchers and those with the responsibility of handling consumer complaints to explore and understand consumer complaint behaviour in its entirety. We argue that, to be able to establish and manage a redress environment that is characterized by an understanding of the specific consumer as well as by effective complaint behaviour handling, it is of the utmost importance that the manufacturer, retailer, consumer consultant and all those that work with consumers' complaints understand the entire complaint process, including the underlying cognitive and emotional processes as well as the consumer's post‐complaint perception of justice and his/her satisfaction with the complaint handling. It is also important to understand the role that consumer‐, product‐ and redress environment‐related variables play in consumer complaint behaviour. The consumer who blames the retailer for the problem and who probably feels angry about the situation and decides to complain will expect redress. From a consumer's viewpoint, complaint‐related justice is, however, not only a matter of economic calculus but also a matter of procedure and interaction. We therefore argue for a holistic approach where consumer complaint behaviour is addressed in its entirety. Practical suggestions that could enhance customer satisfaction are given for manufacturers, retailers and those who deal with consumers' complaints.

Developing a Consumer Policy for the 21st Century

In light of the Productivity Commission's inquiry into Australia's consumer policy framework and administration, this article explores three assumptions that have underpinned our consumer protection framework to date: assumptions about the benefits of competition, self-regulation, and information. It argues that the benefits can be over-stated, and do not always reflect the reality of consumer experience. The article calls for the development of an overarching framework or principles document, with a more moderated approach to competition, self-regulation and information. While the Productivity Commission's draft report has admirably dealt with many of these issues, there is scope for the proposed objectives and recommendations in the final report to reflect more consistently the disparate impact of markets and competition on consumers, and the findings of behavioural economics.

Drug safety as a means of consumer protection: The approximation of laws in the EC medicinal products market and its limitations

The paper characterizes the present state of the approximation of laws in the EC medicinal products market and analyses the deficiencies of harmonization in different areas of drug safety law (marketing authorization, post-marketing control, coordination procedures). But even where the level of legalization and approximation of laws is high, different safety decisions are taken by national authorities. The approximation of laws does not automatically produce uniform safety decisions across the Community. Drug law can only set a framework for consumer protection; it cannot totally programme individual safety decisions. Therefore the paper proposes a European medicinal products authority which should be provided with the competence to decide on new medicinal products (pre-and post-marketing control). The consumer/patient interest in optimal drug safety should be integrated into the procedure of decision-making by a right of participation. Knowledgeable experts, authorized by consumer organizations, should be members of the advisory committee, a step that would help to institutionalize the needed critical discourse on medicinal product safety.

Zur Regulierung von Konsumg�term�rkten

Recent critiques of the costs, effectiveness, and potential inequities in consumer protection measures have drawn attention to the need for a coherent normative framework for consumer protection. This paper sketches therefore a framework for government intervention in the marketplace to protect consumers' economic interests.