Seduction by Disclosure

Abstract

“Seduction by Contract” (“SbC”) by Professor Oren Bar-Gill points to systematic failures in a variety of consumer markets. SbC proposes clever disclosure requirements to mitigate the problems that arise from these failures. Yet, as the title of our essay suggests, disclosures (and not only contractual provisions) can prove to be seductive as well. Rather than moving consumers away from problematic transactions, disclosure requirements might lure them closer.

We suggest broadening the set of considerations that ought to be part of wise disclosures. We propose looking at disclosure requirements from three additional perspectives. The first perspective that we suggest is based on technological advances. In this context, we examine the relation between online information flow and mandatory disclosures. The second perspective that we propose is based on psychological research. We demonstrate that manipulative conduct used by firms is not always subtle by nature, nor can it be easily identified as seductive to consumers. Moreover, it cannot always be easily cured by the type of disclosures advanced in SbC. The third outlook that we suggest involves privacy and data protection law, with an emphasis on the important nexus between privacy interests and disclosure-based solutions. We demonstrate how employing data protection and privacy insights can enrich and improve disclosure analysis, possibly providing novel directions. Furthermore, we note that the “pull” and seduction of overarching disclosure-based solutions might lead to privacy-related harm to consumers.

We conclude by noting that seduction strategies might be proving successful in view of the overall complexity of our day-to-day lives. Individuals are working long hours, burdened by a multitude of tasks. They are constantly bombarded with advertisements, some of them personally tailored. Advertisements convince many consumers that participation in the consumption culture is the key to success, well-being, and personal fulfillment. With all these pieces in place, one might question whether mandating additional disclosures is the proper means for resolving these problems or whether other innovative steps would be preferable.

Keywords: consumer protection, online information flow, consumer contracts, privacy, disclosures, law and psychology, law and technology, data protection