Lawful Distortion of Consumers’ Economic Behaviour – Collateral Damage Under the Unfair Commercial Practices Directive

Abstract:

The Unfair Commercial Practices Directive prohibits unfair business-to-consumer commercial practices with a view to protect consumers’ economic interests. In a market economy such regulation cannot protect the economic interests of all consumers in all situations – there must inevitably be some ‘collateral damage’. In that vein this article discusses situations where consumers may have their economic behaviour distorted by commercial practices that are not unfair under the Directive. It is expected that many consumers will make relatively good decisions most of the time and that there will be a ‘long tail’ of more vulnerable consumers.

The fact that the law allows certain forms of ‘economic distortion’ affects those who have general difficulties in making economic decisions (‘Long Tail Natives’) and all other consumers who, occasionally, are likely to make inferior decisions (‘Long Tail Visitors’). The article suggests how behavioural sciences may be applied to understand these situations in order to protect more consumers from having their economic behaviour distorted by commercial practices. It is suggested that per se prohibitions may be advantageous in some instances as long as traders are not deprived of effective means to inform consumers about themselves and their products.