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Assigning consumers the task of disciplining markets is frequently attempted but rarely achieved. We teach financial literacy classes with the hope that consumers will avoid overly-risky and overly-costly financial products. We require calorie labels with the hope that consumers will use them to reduce obesity. We pre-select a no-overdraft default with the hope that consumers will stick with the default and avoid overdraft fees. None of these approaches are terribly effective at achieving the ends sought because, in each instance, the intervention—the classes, the disclosures, or the defaults—produce unexpected heterogeneous consumer responses and are met with a barrage of firm countermeasures.
So too with consumer-facing competition remedies, the firm subject to the remedy gets the last move and can run circles around the remedy. Reducing firm access to consumer data holds some promise for slowing the speed at which firms can run; microtargeted tactics are likely to be more effective than generic plays in undercutting consumer-facing remedies, and firms need personal data to microtarget. By changing firm incentives, performance-based remedies promise to cut through this dynamic entirely, and while their effectiveness in the competition realm remains to be seen, they should be preferred to the consumer-facing remedies that have already failed. Parallel to the imposition of performance-based competition remedies on firms that have engaged in anticompetitive conduct, competition authorities must engage in market-wide regulation that facilitates effective consumer comparison shopping and therefore substantive competition. Given widespread concern about concentration in so many industries today, competition law may need to break new legal ground to remedy and constrain anticompetitive behavior.
Lauren E. Willis, Consumer-Facing Competition Remedies: Lessons from Consumer Law for Competition Law, 2023 ULR 887 (2023). DOI: https://doi.org/10.26054/0d-ydv4-8ckh