With the amount of exploitative digital tools explicitly targeting consumers’ vulnerabilities on the rise, it hardly seems controversial to call for greater protections. Whether consumer law should be concerned with inequality, however, is a multi-faceted question that depends to an extent on the particular vision and understanding of the aims of consumer law in play, not to mention the original conception of the consumer in whichever legal system is in question. Europe and Latin America have approached the relationship between consumer law and inequality from many different angles that reflect different views on both the goals of consumer law and the role of the consumer in the marketplace (Martínez Alles, 2024).
In the European context, where consumer law’s underlying objective was implementing a set of rules for the creation and maintenance of a single, durable regional market, consumer protection was predominantly understood from the outset in terms of its usefulness for market optimization which took the form of a one-sided, exclusive goal aiming for internal market integration (Bartl, 2015). This unidimensional stance implicitly assumed but never explicitly justified full separability between economic and social interests. The rationale was that EU consumer protection law should be constrained to the economic interests of the parties of any given transaction, a stance that is compatible with trust in market dynamics to promote good faith. Non-transactional interests such as equality, social cohesion, or distributive concerns that might hinder market integration were considered secondary (Micklitz, 2012; Howells, Twigg-Flesner & Wilhelmsson, 2018).
Following this logic, the main purpose behind consumer protection law became providing consumers sufficient information for autonomous decision-making in light of the known and potential risks (Leczykiewicz & Weatherill, 2016). This paradigm of empowerment-through-information embraced by the EU is based on the conceptualization of the consumer as a rational actor who makes autonomous decisions and for whom the law only represents a facilitative back-up rather than reliable protection (Kuenzler, 2017). The emphasis in the EU Directives on the mandatory disclosure of information and rights of withdrawal, which are designed for reasonably well-informed and circumspect consumers, clearly reflects this agenda of empowerment.
Granted, EU consumer policy does not limit itself solely to empowerment initiatives. It also recognizes the need for protection, and some concern for vulnerabilities is evident in the recognition that certain groups of consumers warrant enhanced protection. For example, the Unfair Commercial Practice Directive conveys (limited) concern for the vulnerable consumer by incorporating measures of consumer protection targeting specific disadvantaged groups (5(3) lists “mental or physical infirmity, age or credulity”). Other references to vulnerable consumers are found in the Consumer Rights Directive (34: “mental, physical or psychological infirmity, age or credulity”) and the General Product Safety Directive (8: “children and the elderly”). Together however, the original choice to emphasize empowerment have had a powerful effect in overly restricting consideration of consumer vulnerabilities in EU law as considered secondary (or subsidiary) protective interests (Martínez Alles, 2024).
The situation in Latin America differs significantly. The protective aim of consumer law has been emphasized over the empowerment one since the very beginning in this part of the world. The underlying rationale that prevailed when most of Latin America enacted consumer protection laws (the 1980s and 90s) prioritized specific regulation from the state to properly address the contractual asymmetry of power between suppliers and consumers in the marketplace.[1] This stance reveals awareness of the shortfall, at least in the realm of consumer law, of the classic assumption of formal equality between the contracting parties on the basis of which most nineteenth century Civil Codes were constructed. Consequent to this recognition, consumer law in the region has mainly been understood as a tool to counteract structural power imbalances between suppliers and consumers in the marketplace in order to level the playing field by strengthening consumers’ substantive rights. This stance is perhaps partially explained and, to some extent, reinforced by the constitutional status of consumer rights in so many jurisdictions in the region.[2] Constitutional status complicates the simplicity of the widely professed solid line walling out economic and social rights from the underlying logic of private law institutions, such as contracts, torts, and property law. Ultimately, constitutionalizing consumer rights means that the constitution can be invoked to reshape the legal relationship between consumers and suppliers in the marketplace.
Following the line of thinking then prevalent in Latin America, consumer protection was understood as encompassing much more than empowerment. Its concern was achieving adequate levels of substantive protection for all consumers, whether empowered or not. The underlying conception of the consumer thus markedly departs from the “reasonably well-informed and circumspect” rational actor assumed by the empowerment-through-information model. Instead, under the protection paradigm, the dominant depiction of the consumer is a structurally vulnerable consumer who occupies a varying though decidedly vulnerable position in the market structure, a position which merits a higher degree of protection than in other transactional contexts where private parties negotiate on nearly or at least more equal footing. Under this distinctive structural narrative, the empowerment-through-information strategy (i.e., seeking the information threshold necessary for perceptive and cautious consumers to exercise their freedom of choice), at least as a baseline, is ill-suited for effective protection of consumers deemed, in principle, vulnerable to market power dynamics that (more often than not) impair their ability to inform themselves adequately or make free, autonomous choices.
Just as European consumer protection’s emphasis on information disclosure is not exclusive of concerns for vulnerable consumers, consumer law in Latin America does not exclusively involve substantive protection and heightened concern for vulnerable consumers. Empowerment is certainly another objective of the legislation. The point is that the original emphasis on protection made the model more responsive to inequality in consumer transactions by demonstrating more sensitivity towards consumer vulnerabilities not only in legislation but also, and importantly, in courts. Furthermore, the protective narrative has led to the acknowledgement in some jurisdictions of what are called “aggravated vulnerabilities,” which are individual characteristics (e.g., age, gender, disability) or personal circumstances (e.g., residing in rural or impoverished areas, having limited access to technology or suffering from lack of education, unemployment, or poverty) that on their own or in the aggregate heighten the “structural vulnerability” that exacerbate particular consumers’ risk of entering economic transactions to their detriment (Martínez Alles, 2024). Following this rationale, the debate in Latin America has recently progressed to assessing the addition of a normative category of “hyper-vulnerable consumer” (which corresponds to “aggravated vulnerabilities”) to the “vulnerable consumer” standard (which corresponds to “structural vulnerabilities”). Argentina is one such jurisdiction where the normative category of the hyper-vulnerable consumer has recently been introduced.
Examining the divergence between the Latin American and European visions of consumer law reveals the starkly contrasting default conceptions of the consumer that dichotomously follow from the two pervasive foundational narratives (empowerment or protection). We find in Europe “reasonably well-informed, observant and circumspect” consumers versus “structurally vulnerable” ones in Latin America. These different default assumptions affect ensuing decisions on whether, when and how consumer vulnerability should be addressed. It is the underlying narrative in each jurisdiction that ultimately gives content to and informs the default interpretive benchmarks (“average” or “vulnerable”) used by judges (and other relevant actors) in enforcing consumer protection laws. The problem with this dichotomous narrative is that consumer protection and consumer empowerment are not necessarily always at odds. Another problematic aspect of the empowerment or protection framework is the attention it diverts from the more relevant question (and challenge), which is the appropriate relative weight of each in the design of any given legal system’s consumer law, not to mention the particular circumstances and contexts that might justify modulation of that balance (Martínez Alles, 2024). In other words, the empowerment v. protection characterization overlooks the importance of recognizing and mapping out the interconnectedness and interaction between the two objectives, a relationship that is socially and culturally dependent.
Making an attempt to recalibrate the balance between empowerment and protection might give EU consumer law a fresh start. Balancing the two interests such that the law not only considers the relevance of consumer inequality, but also the deep interconnectedness of economic and social interests, would broaden the playing field on which substantive inequality in consumer transactions can be tackled. Whether EU law will seriously revisit the relevance of consumer vulnerability may seem unlikely. However, sustaining overwhelming reliance on the current “average consumer” standard (the default) is becoming increasingly difficult, especially in the context of the digital economy (Mak, 2022). Complex, self-tuning algorithms and massive data collection allow providers access to much more information than ever before about their consumers’ behavior and personal characteristics (Helberger, Sax, Strycharz & Micklitz, 2022). Acknowledging the salience of the structural character of consumer vulnerability in the marketplace could represent an important step towards overcoming the (over)emphasis on empowerment and the (over)reliance on the default average consumer benchmark. Optimally, embracing the broader space afforded by an integrative approach to tackle power asymmetries in the digital age.
[1] Note that this shared understanding does not directly contradict the great variety of singularities that distinguish national consumer protection laws in Latin America.
[2] Most modern Latin American Constitutions, such as those of Argentina (1994), Brazil (1988), Colombia (1991) and Peru (1993), enshrine consumer rights as fundamental rights. The Chilean Constitution (1980) is an important exception, although the Constitutional Court of Chile has recognized the importance and protective nature of rules for consumer protection.
Art by Tomoko Nagao
Il quarto stato with motta, campari, pirelli, armani, prada, chicco, alitalia and visa at piazza duomo
2016 Digital contents
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