Broadening Consumer Law: Competition, Protection, and Distribution

Policymakers and scholars have in distributional conversations traditionally ignored consumer laws, defined as the set of consumer protection, antitrust, and entry-barrier laws that govern consumer transactions. Consumer law is overlooked partly because tax law is cast as the most efficient way to redistribute. Another obstacle is that consumer law research speaks to microeconomic and siloed contexts—deceptive fees by Wells Fargo or a proposed merger between Comcast and Time Warner Cable. Even removing millions of dollars of deceptive credit card fees across the nation seems trivial compared to the trillion-dollar growth in income inequality that has sparked concern in recent decades.

This Article synthesizes the fragmented empirical literature to offer a broader conception of consumer law’s place in governance. The data indicate that consumer market failures raise prices to consumers by well over a trillion dollars annually, aided by sophisticated algorithmic pricing; that this overcharge worsens economic inequality; and that consumer law, despite prominent critiques of its shortcomings, can reduce overcharge when designed well. The preliminary state of the evidence underscores the need for regulatory monitoring of markets to calibrate consumer law’s potential as a tax alternative. Redistribution is one of the government’s most basic functions, and efficiency one of the law’s guiding principles.

There are strong normative foundations for making macroeconomic distribution an explicit goal of consumer law.