Archive for the ‘Consumer Protection Law’ Category
posted by Anupam Chander
Last week, Foreign Affairs posted a note about my book, The Electronic Silk Road, on its Facebook page. In the comments, some clever wag asked, “Didn’t the FBI shut this down a few weeks ago?” In other venues as well, as I have shared portions of my book across the web, individuals across the world have written back, sometimes applauding and at other times challenging my claims. My writing itself has journed across the world–when I adapted part of a chapter as “How Censorship Hurts Chinese Internet Companies” for The Atlantic, the China Daily republished it. The Financial Times published its review of the book in both English and Chinese.
International trade was involved in even these posts. Much of this activity involved websites—from Facebook, to The Atlantic, and the Financial Times, each of them earning revenue in part from cross-border advertising (even the government-owned China Daily is apparently under pressure to increase advertising) . In the second quarter of 2013, for example, Facebook earned the majority of its revenues outside the United States–$995 million out of a total of $1,813 million, or 55 percent of revenues.
But this trade also brought communication—with ideas and critiques circulated around the world. The old silk roads similarly were passages not only for goods, but knowledge. They helped shape our world, not only materially, but spiritually, just as the mix of commerce and communication on the Electronic Silk Road will reshape the world to come.
October 28, 2013 at 5:46 pm Posted in: Consumer Protection Law, Cyberlaw, First Amendment, Intellectual Property, International & Comparative Law, Privacy, Privacy (Consumer Privacy), Privacy (Electronic Surveillance), Symposium (The Electronic Silk Road) Print This Post No Comments
posted by Steve Semeraro
Prior installments in this series addressed the background leading up to the credit card merchant fee class action and the damages provisions in the b(3) opt out class action. This post addresses the injunctive relief provisions that the settlement in In re: Payment Card Interchange Fee and Merchant Discount Antitrust Litigation styles as a mandatory b(2) non-opt out class action. An upcoming final installment in this series will address the release provisions in the settlement.
B(2) classes are appropriate where the nature of the injunctive relief is such that it will necessarily affect every class member. After setting out the relief proposed in the settlement, I’ll provide some thoughts on whether b(2) is really an appropriate device for this case. Perhaps class action experts out there could weigh in on this issue in the comments.
The injunctive relief set out by the settlement is notable for what is not provided. Nothing in the settlement addresses the core concerns in the complaint about (1) the collective setting of a default interchange fee; (2) the rule prohibiting merchants from rejecting the cards of, surcharging the card transactions of, or otherwise discriminating against some card-issuing banks, but not others; or (3) the rules making it impossible for merchants to route transactions over the least expensive network.
posted by Steve Semeraro
This post will evaluate the settlement’s damages provisions. You can find my first post providing background on the litigation here. The settlement provided that upon the court’s preliminary approval, the card networks would pay $6.05 billion, 2/3 from Visa and 1/3 from MasterCard into a settlement fund. Depending on how many merchants chose to opt out, however, the defendants retained the right to reduce the fund through take down payments of up to 25% of the total and to kill the deal if opt outs exceeded that amount. Opt outs exceeded that amount, but the defendants have not abandoned the settlement. In addition to the flat fee award, Visa and MasterCard agreed to cut their applicable interchange fees by 10 basis points for eight months. Rather than actually reducing the fees paid by merchants, however, Visa and MasterCard would withhold 10 basis points from collected fees that would otherwise have been paid to card issuers. This amount would then be contributed into the settlement fund within 60 days from the expiration of the eight-month period. This contribution would be non-refundable, regardless of opt outs.
posted by Steve Semeraro
I’d like to thank Concurring Opinions for inviting me to blog about In re: Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. This eight-year-old multi-district litigation has produced the largest proposed cash settlement in litigation history ($7.25 billion) along with what is perhaps the most extraordinary release from liability ever concocted. It may also be the most contentious. Over half the name plaintiffs and over 25% of the class, including most large merchants (think Walmart, Target) and most merchant organizations, have objected. On September 12, Eastern District of New York Judge John Gleesaon held a fairness hearing to consider the settlement, and the parties are awaiting his decision. An appeal is a virtual certainty.
This post will provide background on the credit card industry pricing mechanisms that led to this litigation, the legal issues in the case, and the structure of the settlement. (You can read more about the history of the credit card industry’s relationship to the antitrust laws here.) In subsequent posts, I’ll separately analyze the damages and relief provisions in the settlement. (If you can’t wait my working paper analyzing the settlement is here.) If there are particular issues that you’d like to read more about, let me know in the comments and I will respond in subsequent posts.
The credit card industry is atypical, but not unique, in that it competes in a two-sided market, i.e., one that serves two distinct customer bases. A card system like Visa provides both a purchasing device (credit cards) to consumers and a payment acceptance service to merchants. (By way of comparison, the legal blogging market is also two-sided. Concurring Opinions provides both an information forum to its readers and a platform to its advertisers.)
posted by Frank Pasquale
The Treachery of Images[,] probably Magritte’s most famous [painting], shows a well-rendered pipe above its own textual disavowal: “ceci n’est pas une pipe” – or, “this is not a pipe.” In the most obvious reading of the painting, Magritte is said to be pointing out the unbridgeable divide between representation and reality.
Contracts and (particularly) advertisements that use fine print operate on a similar level. The ad’s loudly stated, carefully worded attractions are representations of a proposed deal, the legitimacy of which the fine print discretely disavows. “This is not the deal,” the fine print says. On the subject of Magritte’s painting, Foucault speaks of an “operation cancelled as soon as performed,” a line that might as easily apply to advertising that offers deals too good to be true.
Foucault’s second reading of The Treachery of Images is a little subtler. He suggests that what the sentence “ceci n’est pas une pipe” actually refers to is itself: “this is not a pipe” is not a pipe. In recent years it has become common for fine print to include “unilateral amendment provisions” that entitle the company to change the terms of the deal at anytime as long as they give you written notice. In such cases, the fine print is also referring to itself when it whispers “this is not the deal.”
When people ask me why I’m critical of “notice and consent” in privacy law—well, this is why. The language in so many of these “contracts” is so one-sided, and so open to change over time, that trying to “control one’s data” is a mug’s game.
posted by Dave Hoffman
[A brief note of apology: it's been a terrible blogging summer for me, though great on other fronts. I promise I'll do better in the coming academic year. In particular, I'd like to get back to my dark fantasy/law blogging series. If you've nominations for interviewees, email me.]
One of the major lessons of the cultural cognition project is that empirical arguments are a terrible way to resolve value conflicts. On issues as diverse as the relationship between gun ownership and homicide rates, the child-welfare effects of gay parenting, global warming, and consent in rape cases, participants in empirically-infused politics behave as if they are spectators at sporting events. New information is polarized through identity-protective lenses; we highlight those facts that are congenial to our way of life and discounts those that are not; we are subject to naive realism. It’s sort of dispiriting, really. Data can inflame our culture wars.
One example of this phenomenon is the empirical debate over minimum wage laws. As is well known, there is an evergreen debate in economics journals about the policy consequences which flow from a wage floor. Many (most) economists argue that the minimum wage retards growth and ironically hurts the very low-wage workers it is supposed to hurt. Others argue that the minimum wage has the opposite effect. What’s interesting about this debate -to me, anyway- is that it seems to bear such an orthogonal relationship to how the politics of the minimum wage play out, and the kinds of arguments that persuade partisans on one side or another. Or to put it differently, academic liberals in favor of the minimum wage have relied on regression analyses, but I don’t think they’ve persuaded many folks who weren’t otherwise disposed to agree with them. Academic critics of the minimum wage too have failed to move the needle on public opinion, which (generally) is supportive of a much higher level of minimum wage than is currently the law.
How to explain this puzzle? My colleague Brishen Rogers has a terrific draft article out on ssrn, Justice at Work: Minimum Wage Laws and Social Equality. The paper urges a new kind of defense of minimum wages, which elides the empirical debate about minimum wages’ effect on labor markets altogether. From the abstract:
“Accepting for the sake of argument that minimum wage laws cause inefficiency and unemployment, this article nevertheless defends them. It draws upon philosophical arguments that a just state will not simply redistribute resources, but will also enable citizens to relate to one another as equals. Minimum wage laws advance this ideal of “social equality” in two ways: they symbolize the society’s commitment to low-wage workers, and they help reduce work-based class and status distinctions. Comparable tax-and-transfer programs are less effective on both fronts. Indeed, the fact that minimum wage laws increase unemployment can be a good thing, as the jobs lost will not always be worth saving. The article thus stands to enrich current increasingly urgent debates over whether to increase the minimum wage. It also recasts some longstanding questions of minimum wage doctrine, including exclusions from coverage and ambiguities regarding which parties are liable for violations.”
I’m a huge fan of Brishen’s work, having been provoked and a bit convinced by his earlier work (here) on a productive way forward for the union movement. What seems valuable in this latest paper is that the minimum wage laws are explicitly defended with reference to a widely shared set of values (dignity, equality). Foregrounding such values I think would increase support for the minimum wage among members of the populace. The lack of such dignitary discussions in the academic debate to date has level the minimum wage’s liberal defenders without a satisfying and coherent ground on which to stand. Worth thinking about in the waning hours of Labor’s day.
September 2, 2013 at 9:02 pm Posted in: Behavioral Law and Economics, Civil Rights, Consumer Protection Law, Contract Law & Beyond, Culture, Current Events, Empirical Analysis of Law, Employment Law Print This Post 2 Comments
posted by Daniel Solove
I’m pleased to share with you my new article in Harvard Law Review entitled Privacy Self-Management and the Consent Dilemma, 126 Harvard Law Review 1880 (2013). You can download it for free on SSRN. This is a short piece (24 pages) so you can read it in one sitting.
Here are some key points in the Article:
1. The current regulatory approach for protecting privacy involves what I refer to as “privacy self-management” – the law provides people with a set of rights to enable them to decide how to weigh the costs and benefits of the collection, use, or disclosure of their information. People’s consent legitimizes nearly any form of collection, use, and disclosure of personal data. Unfortunately, privacy self-management is being asked to do work beyond its capabilities. Privacy self-management does not provide meaningful control over personal data.
2. Empirical and social science research has undermined key assumptions about how people make decisions regarding their data, assumptions that underpin and legitimize the privacy self-management model.
3. People cannot appropriately self-manage their privacy due to a series of structural problems. There are too many entities collecting and using personal data to make it feasible for people to manage their privacy separately with each entity. Moreover, many privacy harms are the result of an aggregation of pieces of data over a period of time by different entities. It is virtually impossible for people to weigh the costs and benefits of revealing information or permitting its use or transfer without an understanding of the potential downstream uses.
4. Privacy self-management addresses privacy in a series of isolated transactions guided by particular individuals. Privacy costs and benefits, however, are more appropriately assessed cumulatively and holistically — not merely at the individual level.
5. In order to advance, privacy law and policy must confront a complex and confounding dilemma with consent. Consent to collection, use, and disclosure of personal data is often not meaningful, and the most apparent solution – paternalistic measures – even more directly denies people the freedom to make consensual choices about their data.
6. The way forward involves (1) developing a coherent approach to consent, one that accounts for the social science discoveries about how people make decisions about personal data; (2) recognizing that people can engage in privacy self-management only selectively; (3) adjusting privacy law’s timing to focus on downstream uses; and (4) developing more substantive privacy rules.
The full article is here.
Cross-posted on LinkedIn.
posted by Gerard Magliocca
I was interested to read about a lawsuit that was recently filed against the Metropolitan Museum of Art alleging that the museum is engaged in deceptive business practices with respect to its “admission” fee. Access to the museum is essentially free. But the Museum posts admission fees of various sorts when you walk in. If you look carefully, then you’ll see that these are “recommended” donations. You must give something to enter the Met under a city ordinance, but you can give any amount that you want (such as $.01).
The problem is that lots of tourists (especially foreign tourists) do not know this. They think, upon seeing a list of admission fees, that these are mandatory. And the museum (trust me, I’ve been there many times) does not go out of its way to make things clear. Does this constitute fraud or violate state law? Do New Yorkers want to chime in?
posted by Frank Pasquale
I tried to answer this question at length in a review of Robert Shiller’s Finance and the Good Society. But if you want the short version, look no further than Barry Ritholtz’s list. One could easily expand it into an ever-growing wiki, but sometimes succinctness is supreme. Here’s Ritholtz on the multiple intermediary problem:
Too many people have a hand in your pocket[.] The list of people nicking you as an investor is enormous. Insiders (CEO/CFO/Boards of Directors) transfer wealth from shareholders to themselves, with the blessing of corrupted Compensation Consultants. Active mutual funds charge way too much for sub par performance. 401(k)s are disastrous. NYSE and NASDAQ Exchanges have been paid to allow a HFT tax on every other investor. FASB and accountants have done an awful job, allowing corporations to mislead investors with junk balance statements. The media’s job is to sell advertising, not provide you with intelligent advice. The regulators have been captured.
And while we’re on the topic of the personal consequences of finance, do take a look at Helaine Olen’s Pound Foolish. Olen has been making the intellectual podcast rounds, and offers a devastating portrait of a personal finance industry warped by ideology and greed.
posted by Frank Pasquale
What would a world of totally privatized justice look like? To take a more specific case—imagine a Reputation Society where intermediaries, unbound by legal restrictions, could sort people as wheat or chaff, credit-worthy or deadbeat, reliable or lazy?
We’re well on our way to that laissez-faire nirvana for America’s credit bureaus. While they seem to be bound by FCRA and a slew of regulations, enforcement is so wan that they essentially pick and choose the bits of law they want to follow, and what they’d like to ignore. That, at least, is the inescapable conclusion of a brief but devastating portrait of the bureaus on 60 Minutes. Horror stories abound regarding the bureaus, but reporter Steve Kroft finds their deeper causes by documenting an abandonment of basic principles of due process:
Read the rest of this post »
posted by Frank Pasquale
1) Commissioner Rosch included this intriguing footnote in his concurrence/dissent:
I . . . have concerns that insofar as Google has monopoly or near-monopoly power in the search advertising market and this power is due in whole or in part to its power over searches generally, nothing in this “settlement” prevents Google from telling “half-truths”–for example, that its gathering of information about the characteristics of a consumer is done solely for the consumer’s benefit, instead of also to maintain a monopoly or near-monopoly position. . . .That is a genuine cause for “strong concern.”
Did Google ever say that it was gathering data purely for consumers’ benefit? That would seem to be an odd representation for a for-profit company to make.
Read the rest of this post »
posted by Frank Pasquale
Here is an apt response to the question: “What would an ideal food label look like?:”
Even the simplest information — a red, yellow or green “traffic light,” for example — would encourage consumers to make healthier choices. That might help counter obesity, a problem all but the most cynical agree is closely related to the consumption of junk food.
Of course, labeling changes like this would bring cries of hysteria from the food producers who argue that all foods are fine, although some should be eaten in moderation. To them, a red traffic-light symbol on chips and soda might as well be a skull and crossbones. But traffic lights could work: indeed, in one study, sales of red-lighted soda fell by 16.5 percent in three months.
Having recently spent time at a roundtable with transparency advocates (including one author of this excellent book), I can attest to the fact that only the clearest signals tend to get through the noise in an era of information overload.
posted by Omer Tene
In Europe, privacy is considered a fundamental human right. Section 8 of the European Convention of Human Rights (ECHR) limits the power of the state to interfere in citizens’ privacy, ”except such as is in accordance with the law and is necessary in a democratic society”. Privacy is also granted constitutional protection in the Fourth Amendment to the United States Constitution. Both the ECHR and the US Constitution establish the right to privacy as freedom from government surveillance (I’ll call this “constitutional privacy”). Over the past 40 years, a specific framework has emerged to protect informational privacy (see here and here and here and here); yet this framework (“information privacy”) provides little protection against surveillance by either government or private sector organizations. Indeed, the information privacy framework presumes that a data controller (i.e., a government or business organization collecting, storing and using personal data) is a trusted party, essentially acting as a steward of individual rights. In doing so, it overlooks the fact that organizations often have strong incentives to subject individuals to persistent surveillance; to monetize individuals’ data; and to maximize information collection, storage and use.
October 8, 2012 at 2:36 am Tags: data protection, PETs, Privacy, surveillance, third party doctrine Posted in: Consumer Protection Law, Cyberlaw, Privacy, Privacy (Consumer Privacy), Privacy (Electronic Surveillance), Technology, Uncategorized Print This Post 6 Comments
posted by Omer Tene
Last week I blogged here about a comprehensive survey on systematic government access to private sector data, which will be published in the next issue of International Data Privacy Law, an Oxford University Press law journal edited by Christopher Kuner. Several readers have asked whether the results of the survey are available online. Well, now they are – even before publication of the special issue. The project, which was organized by Fred Cate and Jim Dempsey and supported by The Privacy Projects, covered government access laws in Australia, Canada, China, Germany, Israel, Japan, United Kingdom and United States.
Peter Swire’s thought provoking piece on the increased importance of government access to the cloud in an age of encrypted communications appears here. Also see the special issue’s editorial, by Fred, Jim and Ira Rubinstein.
October 2, 2012 at 2:04 am Tags: cloud computing, data protection, Fourth Amendment, government access, Privacy Posted in: Constitutional Law, Consumer Protection Law, Cyberlaw, Privacy, Privacy (Consumer Privacy), Privacy (Electronic Surveillance), Privacy (Law Enforcement), Privacy (National Security), Uncategorized Print This Post No Comments
posted by Omer Tene
The Sixth Circuit Court of Appeals has recently decided in United States v. Skinner that police does not need a warrant to obtain GPS location data for mobile phones. The decision, based on the holding of the Supreme Court in US v. Jones, highlights the need for a comprehensive reform of rules on government access to communications non-contents information (“communications data”). Once consisting of only a list of phone numbers dialed by a customer (a “pen register”), communications data have become rife with personal information, including location, clickstream, social contacts and more.
To a non-American, the US v. Jones ruling is truly astounding in its narrow scope. Clearly, the Justices aimed to sidestep the obvious question of expectation of privacy in public spaces. The Court did hold that the attachment of a GPS tracking device to a vehicle and its use to monitor the vehicle’s movements constitutes a Fourth Amendment “search”. But it based its holding not on the persistent surveillance of the suspect’s movements but rather on a “trespass to chattels” inflicted when a government agent ever-so-slightly touched the suspect’s vehicle to attach the tracking device. In the opinion of the Court, it was the clearly insignificant “occupation of property” (touching a car!) rather than the obviously weighty location tracking that triggered constitutional protection.
Suffice it to say, that to an outside observer, the property infringement appears to have been a side issue in both Jones and Skinner. The main issue of course is government power to remotely access information about an individual’s life, which is increasingly stored by third parties in the cloud. In most cases past – and certainly present and future – there is little need to trespass on an individual’s property in order to monitor her every move. Our lives are increasingly mediated by technology. Numerous third parties possess volumes of information about our finances, health, online endeavors, geographical movements, etc. For effective surveillance, the government typically just needs to ask.
This is why an upcoming issue of International Data Privacy Law (IDPL) (an Oxford University Press law journal), which is devoted to systematic government access to private sector data, is so timely and important. The special issue covers rules on government access in multiple jurisdictions, including the US, UK, Germany, Israel, Japan, China, India, Australia and Canada.
September 29, 2012 at 4:34 am Tags: cloud computing, data protection, law enforcement, national security, Privacy Posted in: Constitutional Law, Consumer Protection Law, Privacy, Privacy (Consumer Privacy), Privacy (Electronic Surveillance), Privacy (Law Enforcement), Privacy (National Security), Uncategorized Print This Post 2 Comments
posted by Frank Pasquale
American legal history has featured many battles over “freedom of contract,” often interpreted as the “right” of workers to sell their labor at any price, under any terms. Given the recent resurgence of extreme freedom of contract views, I thought this reflection on the reality TV show “Here Comes Honey Boo Boo” might interest readers:
Americans, it turns out, can’t get enough of Honey Boo Boo, mom June, and the rest of the clan . . . some of whom come with nicknames that seem straight out of a quaint novel about those colorful southerners, like Sugar Bear. That Here Comes Honey Boo Boo trafficked in and showcased the grossest of gross stereotypes about lower middle class southern white folk was deemed inconsequential. The family, led by matriarch June, was in on the joke. How could the family be exploited if they actively wanted to be exploited?
posted by Omer Tene
Much has been written over the past couple of years about “big data” (See, for example, here and here and here). In a new article, Big Data for All: Privacy and User Control in the Age of Analytics, which will be published in the Northwestern Journal of Technology and Intellectual Property, Jules Polonetsky and I try to reconcile the inherent tension between big data business models and individual privacy rights. We argue that going forward, organizations should provide individuals with practical, easy to use access to their information, so they can become active participants in the data economy. In addition, organizations should be required to be transparent about the decisional criteria underlying their data processing activities.
The term “big data” refers to advances in data mining and the massive increase in computing power and data storage capacity, which have expanded by orders of magnitude the scope of information available for organizations. Data are now available for analysis in raw form, escaping the confines of structured databases and enhancing researchers’ abilities to identify correlations and conceive of new, unanticipated uses for existing information. In addition, the increasing number of people, devices, and sensors that are now connected by digital networks has revolutionized the ability to generate, communicate, share, and access data.
Data creates enormous value for the world economy, driving innovation, productivity, efficiency and growth. In the article, we flesh out some compelling use cases for big data analysis. Consider, for example, a group of medical researchers who were able to parse out a harmful side effect of a combination of medications, which were used daily by millions of Americans, by analyzing massive amounts of online search queries. Or scientists who analyze mobile phone communications to better understand the needs of people who live in settlements or slums in developing countries.
September 20, 2012 at 4:28 am Tags: analytics, big data, data protection, Privacy Posted in: Consumer Protection Law, Cyberlaw, Privacy, Privacy (Consumer Privacy), Privacy (Medical), Technology, Uncategorized Print This Post 3 Comments
posted by Frank Pasquale
In 1968, a group of law student researchers helped Ralph Nader publish a highly critical report on the Federal Trade Commission. They concluded that the FTC failed to “detect violations systematically,” to “establish efficient priorities for its enforcement energy,” to “enforce the powers it has with energy and speed,” and to “seek sufficient statutory authority to make its work effective.” As Tim Muris notes, the report “lambast[ed] the agency and characteriz[ed] its overall performance as ‘shockingly poor.’”
The FTC has taken many important initiatives to respond to concerns identified in the report. But we must now reconsider agency’s record, as the digital world changes kaleidoscopically and budget restraints hamstring even the best-intentioned FTC staff.
About the closest thing we’re likely to get to another “Nader Report” was Peter Maass’s expose in Wired on challenges facing privacy enforcement and consumer protection in the digital age. Here’s one of the many issues he identifies:
The mismatch between FTC aspirations and abilities is exemplified by its Mobile Technology Unit, created earlier this year to oversee the exploding mobile phone sector. The six-person unit consists of a paralegal, a program specialist, two attorneys, a technologist and its director, Patricia Poss. For the FTC, the unit represents an important allocation of resources to protect the privacy rights of more than 100 million smartphone owners in America. For Silicon Valley, a six-person team is barely a garage startup. Earlier this year, the unit issued a highly publicized report on mobile apps for kids; its conclusion was reflected in the subtitle, “Current Privacy Disclosures Are Disappointing.” It was a thin report, however. Rather than actually checking the personal data accessed by the report’s sampling of 400 apps, the [17 page] report just looked at whether the apps disclose, on the sites where they are sold, the types of personal data that would be accessed and what the data would be used for.
As Maass notes, “The agency can take companies to court, but its overworked lawyers don’t really have the time to go the distance against the bottomless legal staffs in Silicon Valley.” Like an SEC pushed by budget constraints to pursue mere “cost of doing business” settlements, the FTC too often has to capitulate to symbolic penalties with dubious deterrent effect.
Read the rest of this post »
posted by Omer Tene
Some consider the right to privacy a fundamental right for the rich, or even the rich and famous. It may be no coincidence that the landmark privacy cases in Europe feature names like Naomi Campbell, Michael Douglas, and Princess Caroline of Monaco. After all, if you lived eight-to-a-room in a shantytown in India, you would have little privacy and a lot of other problems to worry about. When viewed this way, privacy seems to be a matter of luxury; a right of spoiled teenagers living in six bedroom houses (“Mom, don’t open the door without knocking”).
To refute this view, scholars typically point out that throughout history, totalitarian regimes targeted the right to privacy even before they did free speech. Without privacy, individuals are cowed by authority, conform to societal norms, and self-censor dissenting speech – or even thoughts. As Michel Foucault observed in his interpretation of Jeremy Bentham’s panopticon, the gaze has disciplinary power.
But I’d like to discuss an entirely different counter-argument to the privacy-for-the-rich approach. This view was recently presented at the Privacy Law Scholar Conference in a great paper by Laura Moy and Amanda Conley, both 2011 NYU law graduates. In their paper, Paying the Wealthy for Being Wealthy: The Hidden Costs of Behavioral Marketing (I love a good title!), which is not yet available online, Moy and Conley argue that retailers harvest personal information to make the poor subsidize luxury goods for the rich.
This might seem audacious at first, but think of it this way: through various loyalty schemes, retailers collect data about consumers’ shopping habits. Naturally, retailers are most interested in data about “high value shoppers.” This is intuitively clear, given that that’s where the big money, low price sensitivity and broad margins are. It’s also backed by empirical evidence, which Moy and Conley reference. Retailers prefer to tend to those who buy saffron and Kobe Beef rather than to those who purchase salt and turkey. To woo the high value shoppers, they offer attractive discounts and promotions – use your loyalty card to buy Beluga caviar; get a free bottle of Champagne. Yet obviously the retailers can’t take a loss for their marketing efforts. Who then pays the price of the rich shoppers’ luxury goods? You guessed it, the rest of us – with price hikes on products like bread and butter.
July 26, 2012 at 2:05 am Tags: big data, data protection, discrimination, price discrimination, Privacy Posted in: Advertising, Conferences, Consumer Protection Law, Cyberlaw, Privacy, Privacy (Consumer Privacy), Technology, Uncategorized Print This Post 6 Comments
posted by UCLA Law Review
Volume 59, Issue 5 (June 2012)
|Implicit Bias in the Courtroom||Jerry Kang et al.||1124|
|The Supreme Court’s Regulation of Civil Procedure: Lessons From Administrative Law||Lumen N. Mulligan & Glen Staszewski||1188|
|Techniques for Mitigating Cognitive Biases in Fingerprint Identification||Elizabeth J. Reese||1252|
|Credit CARD Act II: Expanding Credit Card Reform by Targeting Behavioral Biases||Jonathan Slowik||1292|
|Shocking the Conscience: What Police Tasers and Weapon Technology Reveal About Excessive Force Law||Aaron Sussman||1342|
July 1, 2012 at 2:39 pm Posted in: Administrative Law, Behavioral Law and Economics, Civil Procedure, Constitutional Law, Consumer Protection Law, Courts, Evidence Law, Law Rev (UCLA) Print This Post No Comments