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Hans-W. Micklitz, Anne-Lise Sibony and Fabrizio Esposito

For decades, consumer law has been the stepchild of the legal discipline, neither public nor private law, not classic but postmodern, not ‘legal enough’, ‘too political’, in short, a discipline at the margins, suffering from the haut goût and striving to change society through law for the ‘better’. Just like Atreyu, Frodo Baggins, Luke Skywalker, the Ghostbusters, Naruto Uzumaki, Dreamworks’ dragon trainer, and many others, consumer law is the underdog carrying the burden of saving the day. Times are changing. We are perhaps reaching the point at which the world comes to understand the real value of consumer law in a society that is dominated by and dependent on private consumption. Publishing houses and ever more numerous researchers from public and private law perspectives, working on national, European and international law are getting into what is no longer a new legal field. Now the time is ripe for a whole Handbook on Consumer Law Research which brings methodology to the fore. This first chapter pursues three aims: first, to embed consumer law research into the overall development of legal research since the rise of consumer law in the 1960s; secondly, to explain our choice to focus on the behavioural turn in consumer law research and present the range of contributions in this volume that engage with the upcoming strand of research; and thirdly, to explore how the recent attention to behavioural insights can be combined with a pre-existing body of doctrinal research and social legal research in consumer law, and outline avenues for further research.

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Fabrizio Esposito

This chapter introduces the reader to the basic behavioural concepts and their importance for consumer law. The analysis is organized on three levels, the descriptive, the axiological and the prescriptive. The focus is primarily on European research and its connections with EU law. At the descriptive level, the chapter defends the definition of ‘nudge’ as ‘an effect of the choice architecture that alters people’s behaviour by making use of one or more behavioural trait’ and offers a taxonomy of nudges. Then, it proposes to label ‘law and behavioural sciences’ the research field devoted to investigating the legal and policy relevance of behavioural insights and emphazises the importance of the concept of behavioural market failure in this regard. At the axiological level, the chapter suggests that, instead of focusing on the opposition between autonomist and welfarist frameworks, it is more interesting to reflect on the importance given to individual preferences and to look at their role in legal practice. At the prescriptive level, the chapter reviews the behavioural toolkit and then offers some insights on how to incorporate behavioural insights in legal discourse. It is argued that the concept of consumer weakness is particularly porous to behavioural insights, and that scientific uncertainty is not a categorical reason against their incorporation. The chapter concludes with some remarks about future research in consumer law and behavioural sciences.

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Philipp Hacker

While proponents of nudging claim that it respects basic liberal values such as freedom of choice, critics have mounted an ‘autonomy challenge’ to behaviorally informed interventions, portraying it as a menace to liberty, autonomy and dignity. This chapter sets out to assess the validity of these postulates with respect to human autonomy. Increasingly, the nudging literature is unpacking the procedural dimension of autonomous actions. However, what is lacking is a general theory describing autonomous processes which result in legally relevant actions. The chapter draws on contemporary philosophical conceptualizations of autonomy to propose such a coherent framework against which specific instances of nudging can be tested. This focus on the interference with autonomous cognitive processes allows a nuanced picture of nudges to be painted. In particular, they can be evaluated according to their degree of compliance with a cognitive ‘independent procedure requirement’. While many nudges are transparent enough – even in the specific ways in which they influence behavior – to pass muster under this test, others such as framing and default rules are found to limit individual autonomy. However, such limitations can be justified by appealing to a range of publicly defensible normative goals, such as public or individual health, greater equality or fairness. Only if such justification is unavailable or unconvincing, as in the case of subliminal advertisements, autonomy is in fact violated and the intervention must be rejected. In all other cases, measuring behavioral strategies against the yardstick of individual autonomy provides a necessary dimension of public control and accountability which, in turn, helps to reassert collective autonomy at the societal level.

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Fernando Gómez Pomar and Mireia Artigot Golobardes

Economics addresses choice and behaviour at the individual level, under assumptions relating to both information and rationality. Rational choice and behavioural models represent two different approaches to individual decision-making with respect to the parameters that shape individuals’ decisions and the possibilities of reaching optimal outcomes based on individuals’ preferences. Understanding how individuals take decisions is of crucial importance for contract design, particularly in the context of consumer contracts. This chapter argues that neither rational choice nor behavioural frameworks are entirely incompatible, neither contain the sole ‘right and general’ answer to all the problems and challenges facing consumer contracting. Instead, a more nuanced approach, which is flexible enough to privilege one or the other model depending on the question to be answered, the dimension to be explained and the added value or the shortcomings of one model in a given setting, seems to be more enlightening, and in the end more desirable, at both the theoretical and the policy levels.

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Anne-Lise Sibony

This chapter examines the roles of empirical research in consumer law. It does so from a contemporary perspective, taking into account the increased recourse to empirical data both in legal scholarship and in policy-making in conjunction with the behavioural turn. It addresses primarily legal researchers educated in a doctrinal tradition who take an interest in consumer law and are considering adding an empirical dimension to their work or want to incorporate empirical work among the sources they use. In this perspective, section 1 offers a typology of legal questions and discusses how each relates to empirical issues. A distinction is drawn between internal legal questions (questions about how rules relate to one another) and external legal questions (questions about law and the world). It is shown that, while external legal questions about effectiveness and efficiency of rules present a natural affinity with empirics, internal legal questions can also have an empirical component. Taking examples in consumer law, the chapter illustrates that empirical issues lie in the middle of questions about the validity, proportionality or interpretation of rules. Section 1 also highlights the particular interest of one type of external legal question for empirical research, besides issues of effectiveness and efficiency, namely, reality-check questions, which confront implicit behavioural claims embedded in the law with what is known of consumer behaviour (or firms’ behaviour). Section 2 reviews an illustrative selection of recent empirical work, which, remarkably, all pertain to external legal questions. It characterises as rhetorical the use of data in legal argument and illustrates this claim with two series of examples. Legal discourse based on data which express a critique of existing legal regimes provide the most striking illustrations. The rhetorical intensity recedes in reflection about policy inception and fine-tuning of policy-interventions. Yet, all the examples show that lawyers only ever use data to make arguments. Turning to enforcement of consumer law, a recent trend in the literature advocates more data-intensive enforcement methods. Such proposals, together with substantive and procedural questions raised by algorithmic powered commercial practices provide rich perspectives for further research outlined in section 3.

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Franziska Weber

This chapter provides a review of empirical US literature on behavioural research with a view to consumer law. It focuses on positive rather than normative developments. Disputed as the concept of ‘nudging’ and the ethics of behavioural interventions to some extent still are, the US policy-maker has been implementing behavioural findings into law- and policy-making. Therefore, this chapter also includes recent empirical research that addresses open challenges when it comes to such implementation efforts. It concludes with suggestions for future research.

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Joasia Luzak

In their search for increased effectiveness of policy instruments, European and national policy-makers increasingly show interest in behavioural research, as a source for insights on the impact of various policy measures on consumer behaviour. However, policy-makers rarely comprehensively follow recommendation of behavioural researchers, owing to the need to account for interests other than those of consumers or the disbelief in their applicability and effectiveness. This chapter discusses to what extent policy-makers base their policies on the findings of consumer behaviour research and whether their efforts appear to contribute to increasing the effectiveness of consumer protection measures. The author argues that it may be inappropriate to draw any conclusions as to the soundness of behavioural research as a basis for policy-making from the shortcomings of current measures allegedly relying on its findings, where such measures have implemented behavioural recommendations only partially, owing to either normative or factual reasons. Further, the author appeals for more transparency in policy-making based on behavioural insights, particularly the clarification of why policy-makers veer away from recommendations based on behavioural research. The impact that behavioural research has had in European and national policy-making is analysed in the area of consumer protection relating to sustainable and healthy consumption. Among the types of policy interventions considered in this chapter are information obligations (eco-labelling and health claims, but also their information design), measures increasing consumers’ trust (right of withdrawal and trustmarks), as well as regulatory measures (consumer education, tax policies and product bans).

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Kai P. Purnhagen

This chapter introduces a regulatory validity test for behavioural studies to be implemented into legal contexts using the example of European Union consumer law. It takes seriously criticism regarding a lack of legal knowledge and lack of involvement of legal expertise into behavioural policy-making and provides a solution for how to implement them. When assessing the quality of behavioural studies, in this context meaning the ‘fit for purpose’ to guide law-making and interpretation, the ‘regulatory validity’ test will ascertain that such studies can be used as indicators to support legal argumentation.

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Jan Trzaskowski

The purpose of this chapter is to present and discuss consumer protection aspects of laws concerning marketing in light of the ‘behavioural turn’ with a view to suggest how behavioural sciences may be used to reconstruct this legal field – and to provide inspiration for further research. First, the law concerning unfair commercial practices is introduced, including in particular ‘the average consumer’ and ‘professional diligence’. These two normative abstractions are hereafter discussed in light of revelations within behavioural sciences (the behavioural turn) and by taking developments in marketing into account. Basically, the idea is to discuss how empirical evidence corresponds with and may affect marketing law. This includes how and to what extent behavioural sciences can be used to draw the fine line between legitimate influence and illegal distortion of consumers’ economic behaviour. Finally, the chapter includes a discussion of law’s role and possible contribution to defining the proper level of consumer protection, including the delicate balancing between paternalism and the consumer’s right to self-determination

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Geneviève Helleringer

There are important behavioural reasons why financial consumers tend to make suboptimal financial decisions. Regulatory responses are warranted. Existing regulations have been designed to protect financial consumers and make them better off, but well-meaning interventions may sometimes make consumers worse off as they contain behaviourally blind spots and are mis-calibrated. The behavioural lens shows that the calibration of such regulation is itself delicate: well-meaning regulatory interventions that do not take into account behavioural insights may make consumers worse off. The limited cognitive power of financial consumers and their preference for the present are two large elements of the hidden behavioural iceberg on which traditional regulatory interventions have often crashed, even as behavioural realities are becoming more present in the regulatory conversation. Financial firms are often in a position to exploit behavioural traits, which increases the necessity for regulators to take into consideration behavioural realities. It also strengthens the case for performance-based requirements that put the onus on firms to harness behavioural traits in a manner that is favourable to consumers. Meanwhile, interventions designed to modify the choice architecture can be truly effective under certain conditions. In particular, there is a growing interest in personalised regulatory interventions that take into account individual differences in behaviour and degrees of rationality.