The Consumer and Advertising Regulation in the Television without Frontiers and Audiovisual Media Services Directives

This paper aims to assess the balance between the commercial interests of broadcaster and advertiser and the interests of the viewer, as well as programme makers. The new Audiovisual Media Services Directive (AVMSD) seeks to clarify and to simplify whilst maintaining the traditional European broadcasting landscape. The recurrent theme of the debate about legislative revision has been based in the vocabulary of consumer choice empowered by technology. The use of this vocabulary then leads to assumptions about the ability of the consumer to make choices. Insofar as those choices existed, they have been limited by developments in the AVMSD and in the broadcasting environment. Despite the claims of the AVMSD about viewer choice, it seems likely that the viewer will have no choice whether to receive commercial communications or not.

Looking Ahead—Future Issues when Reflecting on the Place of the iConsumer in Consumer Law and Copyright Law

The following is a brief report of the discussion and main comments that were made during a workshop ‘The place of the iConsumer in EU and US law—protecting consumers of copyright protected content’, held in Amsterdam on 14 and 15 of December 2007. The workshop was part of a series of joint events organised by the Berkeley Centre for Law and Technology, University of California (BCLT) and the Institute for Information Law (IViR), University of Amsterdam on copyright and a follow-up to the conference on ‘Copyright, digital rights management technology and consumer protection’ that was held at the UC Berkeley in March 2007. The main goal of the workshop was to confront a consumer law approach with the more commonly discussed approach of internalising user-related questions directly into copyright law. To this end, a selected group of European and US experts in both fields, copyright law and consumer law, were invited. The participants were then asked to share their thoughts and views from the different fields of law with regard to a number of main statements given by the organisers. The transatlantic perspective further added to the discussion. The main purpose of this report is to point to a number of issues that, according to the workshop participants, should be taken into account in future discussions concerning the legal position of the iConsumer. This report summarises the discussion along the three statements that the organisers asked participants to consider. The report gives some background information for each of the statements, to then describe the main arguments made during the workshop, to the extent that this discussion has not already been internalised in the papers that are part of this special JCP issue.

A “New Approach” to Standards and Consumer Protection

As consumer use of information and communication technology (ICT) products grows, the importance of ICT standards in consumer markets also grows. While standards for manufactured products were once developed at the national level in formal standards bodies, standards for ICT products today are more likely to be developed by informal standards bodies that target global markets, creating new challenges for national consumer protection laws. As part of the process of creating a single market, the EU developed an innovative and successful form of “coregulation” known as the “New Approach” that coordinated the work of legislators and standards developers to reduce technical barriers to trade in the internal market. In order to protect consumer interests in markets for ICT products effectively, another “New Approach” is needed to coordinate the work of global ICT standard-developing organizations with the goals of national and regional consumer protection laws, but the institutional challenges facing such a strategy are daunting. The French DADVSI legislation represents progress in this direction; further progress may be possible by adopting “better regulation” strategies.

Crime,punishment, and consumer protection

Criminal law is perhaps society’s strongest technique of formal censure. By labelling an activity as “criminal” we attach to it a special stigma. Despite this, the United Kingdom (UK) has a long history of criminalising conduct that lacks the seriousness we might expect that label to involve. One area where criminal sanctions have been commonly used in the UK is consumer protection. This article argues that it is time to reconsider the role of criminal law in consumer protection and considers how alternative regimes may better-protect the consumer from business wrongdoing.

Country of Origin Principle in the EU Market for Audiovisual Media Services: Consumer’s Friend or Foe?

The country of origin principle, the cornerstone of the EU Television Without Frontiers Directive – to become the Audiovisual Media Services Directive – is often criticised as being insensitive to the legitimate national public interest to protect viewers – and consumers – of audiovisual media content. This paper seeks to demystify this pessimistic perception of the country of origin rule from the perspective of the consumer interest. It demonstrates that the possible negative repercussions of the country of origin logic for consumer welfare are mitigated in three ways: by specific derogations possibilities foreseen in the Directive in case of violations of the fundamental rules on protection of minors and of human dignity; through the margin of broadcasting control left to the Member States in the areas beyond those coordinated by the Directive, and by means of a new two-step anti-circumvention procedure introduced by the new Directive.

The shipping strategies of internet retailers: Evidence from internet book retailing

Managing the shipment of goods to consumers is one of the central aspects of retail competition on the internet. In this article, we analyze internet retailers’ shipping strategies using data from the internet book retailing industry. We find that, controlling for a variety of observable firm characteristics, firms with lower product prices offer lower shipping fees and higher quality shipping in terms of average delivery time, compared to firms with higher product prices. These patterns cannot be readily reconciled with a large class of models of competition under perfect consumer information. Theories based on imperfect consumer information can explain the findings better.

Market Concentration, Economic Welfare, and Antitrust Policy

The authors review the foundation for incorporating market concentration directly into consumer utility functions, and develop a general equilibrium model to derive welfare-maximizing principles for optimal enforcement of antitrust policies toward concentrated market structures, including merger policy. An intriguing result is that increased market concentration can fail to maximize economic welfare even if a proposed merger might generate positive net efficiencies.

Download of Copyright-Protected Internet Content and the Role of (Consumer) Contract Law

The software, music, and movie industries keep suggesting to consumers that if they copy digital contents they may find themselves in jail. Moreover, horrifying damage claims are in the air. The problem with these scenarios is, amongst others, that it is difficult to understand for consumers where their rights end and where illegal use of content begins. This article focuses on the contractual relationship between online content providers and consumers. It explores relevant consumer law issues and lays open the legal uncertainties of the current regimes at the European Community (EC) and national level. The article then looks at current ideas put forward by the Commission on how to regulate internet consumer law. It concludes that a sector-specific i-consumer contract law should be introduced and offers proposals related to its possible content.

Third-Degree Price Discrimination in the Presence of Asymmetric Consumption Externalities

In this paper, we consider third-degree price discrimination in two markets in the presence of asymmetric consumption externalities; we establish that under plausible conditions, a firm reduces its price in the market with low price elasticity of demand. The firm can increase its profits by reducing the price for these consumers and enlarging the demand for other consumers, provided that positive consumption externalities exist. Moreover, we show that third-degree price discrimination enhances not only the firm’s profit but also total consumer surplus.

Fundamental Rights and the European Regulation of iConsumer Contracts

This paper addresses the question of how fundamental rights affect European legislation and adjudication on contracts regarding digital information services (iConsumer contracts). Fundamental rights may be seen as representing political choices for the protection of certain values in society, but at the same time, they are enacted rules of the legal system, which may be invoked to enforce the protection of the interests they represent. It is submitted that because of this double-faced nature, they can bring to the fore policy issues in contract legislation and case law. Fundamental rights can thus play a role in evaluating the policy choices that are being made in the review of the acquis communautaire in the field of consumer law. For iConsumer contracts, that means that the rights of consumers, authors, and suppliers of copyright-protected content affect the choice of rule-solutions on the European legislative level. Furthermore, these rights have an impact on the case law of the European Court of Justice in the field of e-commerce. Fundamental rights help define the various rule-solutions the Court can choose from and thus demarcate the law-making capacity of the judiciary.

Effect of credit guarantee policy on survival and performance of SMEs in Republic of Korea

This study evaluates the effect of credit guarantee on SMEs at the firm level. To estimate the effect of credit guarantee, we analyze relations between credit guarantee, the survival of guaranteed firms, and their productive performance. The result indicates that credit guarantee frequency enabled guaranteed firms to achieve good performances in general. On the contrary, the effect of guarantee amounts is ambiguous in that there is difference between the contemporary effect and the lagged effect. Therefore, we conclude that credit guarantee satisfied partially its goal to alleviate SMEs’ difficulty in acquiring finance and to stabilize employment.

Passengers,consumers, and travellers: The rise of passenger rights in EC transport law and its repercussions for Community consumer law and policy

EC transport law is set to be complemented by a series of Regulations giving rights to passengers for almost every mode of transport. These Regulations not only give transport law a distinct consumer dimension but also add new elements to European private law. This paper attempts to provide a horizontal, or intermodal, survey of these Regulations, adopted and proposed. It is argued that passenger law, although originating separately and remaining a sector distinct from other fields of law, has become part of a wider, three-stranded notion of European consumer policy deserving due attention as the force most dynamically expanding the area of Community law of contracts and of torts. The paper will point to the elements of consumer contract law and the law on travel and tourism related to passenger transport and elaborate on the basics for finding a common notion of the key terms like “passenger” and “damage” for Community law. It concludes with some points for further reflection.

Banking Competition and SMEs Bank Financing. Evidence from the Italian Provinces

This work investigates whether local differences in banking competition impact on the amount of bank debt used by Italian small and medium sized manufacturing firms. Sample selection and Double Hurdle models are adopted as the process, which results in the choice of bank financing may differ from that determining its amount. Our main finding is that more competitive banking markets seem to be associated with relatively higher usage of bank debt by less transparent firms. On the other hand, a higher banking competition seems to have no effect on the probability of receiving bank loans.

Entry for supermarket feature me-too brands: An empirical explanation of incidence and timing

Anticipating the speed of market entry can help the feature pioneer and me-too brands develop more informed product launch strategies. This paper explains imitation speed, broken down into the incidence and timing of imitation, across 144 imitators and 847 nonimitators in 22 consumer packaged goods subcategories. On average, it takes 85 weeks for a me-too brand to introduce its feature imitation. Increasing category market share increases the incidence of imitation and, conditional on their occurrence, decreases the time to market of feature imitators. Faster entry arises for store brands as they are more likely to imitate and tend to take shorter times to market. Price premium does not have a significant effect on the incidence or timing of a me-too brand as it tends to dissipate after the first year. Brands imitate innovative features more often than noninnovative features. Some evidence indicates these imitators can take a longer time to enter the market. New product managers may benefit from the direction as well as the magnitude of these results.

Technological advances in digital cameras: Welfare analysis on easy-to-use characteristics

This paper examines the characteristics attributed to the success of digital cameras by studying both the demand and the supply sides of the digital-camera market. A discrete choice model is employed to investigate consumer preferences over digital camera characteristics during the period 1996–1998. The empirical findings reveal that Sony’s ‘Easy-to-Use’ storage system contributes significantly to Sony’s demand advantage and profitability. Also, the welfare analysis demonstrates that ‘Easy-to-Use’ attributes significantly contribute to social welfare improvement.

Entrepreneurship and competitiveness dynamics in Latin America

This study analyses the relationship between entrepreneurial dynamics and the level of competitiveness in Latin American countries. Based on a stage of economic development model, we demonstrate that Latin American countries under the model followed different paths related to competitiveness. These different paths can explain the effect of specific competitiveness conditions on entrepreneurial dynamics in Latin America.

The effect of advertising on brand awareness and perceived quality: An empirical investigation using panel data

We use a panel data set that combines annual brand-level advertising expenditures for over three hundred brands with measures of brand awareness and perceived quality from a large-scale consumer survey to study the effect of advertising. Advertising is modeled as a dynamic investment in a brand’s stocks of awareness and perceived quality and we ask how such an investment changes brand awareness and quality perceptions. Our panel data allow us to control for unobserved heterogeneity across brands and to identify the effect of advertising from the time-series variation within brands. They also allow us to account for the endogeneity of advertising through recently developed dynamic panel data estimation techniques. We find that advertising has consistently a significant positive effect on brand awareness but no significant effect on perceived quality.

Illusory Price Increases after the Euro Changeover in Germany: An Expectancy-Consistent Bias

The aim of the present report is to review research demonstrating the role played by expectations for observed illusory price increases after the euro introduction in Germany. In laboratory experiments when participants are asked to estimate price changes in a restaurant following the euro introduction, the price estimates are found to be biased in the direction of the expectation of rising prices. The research also examines the extent to which a similar judgment bias is evident in other areas and how interventions counteract the bias. A further focus of the research is on the underlying process. In this respect the results show that the bias is based on a selective outcome correction process not previously described. Theoretical implications and practical implications for consumer policy issues are highlighted.

The average consumer, the unfair commercial practices directive, and the cognitive revolution

This article examines the merit of the test of the average consumer as a basis for judicial and regulatory action. In the first part, we describe the origin of the test, its application in the Unfair Commercial Practices Directive and its possible developments. In the second part, we discuss the theoretical grounds of the average consumer test (i.e., information and rationality), drawing upon the studies of cognitive psychology and behavioural economics concerning consumers’ behaviour. The result of our analysis is that we call into serious question the practical workability of the test of the average consumer, which requires consumers an overly demanding standard of rationality and information without dedicating much attention to the real functioning of consumer behaviour. The average consumer may be described as an interesting, anti-paternalistic and, to some extent, useful notion. It is, however, an overly simplistic concept with little correspondence with the real world of individual consumer behaviour and should be reinterpreted more flexibly, or even abandoned to mirror consumer behaviour more effectively.