Chapter 4: Market Transparency and Consumer Protection
CHOICE OF REGULATORY TECHNIQUE Requiring that the consumer be provided with specified information about a contemplated transaction is a regulatory technique that has enjoyed considerable popularity in the development of EC measures affecting protection of consumers’ economic interests.1 This approach to improving transparency in the pre-contractual phase has frequently been combined with protection in the post-contractual phase, most strikingly through the prescription of a ‘coolingoff’ period within which the consumer is entitled to exercise a right to withdraw from an agreed deal. These techniques do not address directly the content of the bargain between trader and consumer. Contractual terms remain to be fixed by private negotiation. The assumption underlying the type of regulatory technique examined in this chapter is that an imbalance in economic power can be sufficiently corrected by adjusting the environment within which the bargain is struck by giving the consumer extra information in advance and extra time to consider the implications. There is much to be said for these techniques as forms of regulation which minimize interference with private autonomy. Viewed in their most favourable light, they yield a more efficient market by promoting negotiation and informed consumer choice, without substituting public decision-making about the contents of contracts for private choice. More intrusive controls, such as a ban on particular types of contract, may unduly diminish consumer choice. To assert a power directly to check the validity of particular terms may distort the market, for example by dissuading traders from offering a wide choice. The aspiration to...
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