Update: Audio of this talk is now available and video is embedded after the jump.
Professor Omri Ben-Shahar spoke on the
"Myths of Consumer Protection" at this year’s annual Ronald H. Coase lecture
for first year law students. Ben-Shahar discussed why he believes the modern
consumer protection movement is largely misguided. Consumer advocates cite
three things that consumers need: information about products, access to courts,
and remedies for wrongs done to them. In the eyes of the consumer advocate, a
consumer cannot compete with large corporations without these three things. It
would be David versus Goliath; and Goliath would always win.
#1: Consumers will be better off if they have more information
Warning labels are on everything. You can’t install a piece of
software or use a web site without checking some box guaranteeing that you have
read the Terms of Service. Do these forms of disclosure benefit consumers?
Ben-Shahar believes not. Disclosures of
information are often technical and hard to digest. People do not want to spend
the time to read these disclosures. In a study of online viewing habits, 1/1000
people actually read a site’s Terms of Service, and that single curious
individual only glanced at the complicated contract for an average of forty
seconds—perhaps just a misclick.