Differentiated Consumer Law: Reassessing the One-Size-Fits-All Model Image by Freepik

Differentiated Consumer Law: Reassessing the One-Size-Fits-All Model

It is superfluous to say that not all consumers are the same. Different consumers not only want different things but also have different personalities, vulnerabilities, and skills. Should European consumer law therefore become more differentiated?


Currently, there is not much differentiation within European consumer law. All natural persons not acting in the course of a trade, business, craft or profession fall within the definition of a consumer and are entitled to the same level of protection regardless of their individual needs. European consumer law, in other words, adheres to a one-size-fits-all model (Mak 2022). As a consequence of this model, some consumers suffer from underprotection – they encounter so-called protection gaps (Rösler 2010) – while others enjoy overprotection (Reich 2017). Moreover, due to the one-size-fits-all model, small businesses are usually not entitled to protection. However, sometimes a small business is not (much) different from a consumer (Micklitz 2013). 

To some extent, these issues are recurring and therefore not new (Micklitz & Wilhelmsson 2021). However, the complexity of modern markets influenced by digitalization, platformization and sustainability prompts the question of whether the current level of differentiation within European consumer law is still fit for purpose (Mak 2023). European consumer law should probably take more relevant facts into account to not only better distinguish between persons who need protection and persons who do not, but also to better match the protection that is offered with the protection that is needed. At the same time, it should be recognized that something may be lost if the one-size-fits-all model is replaced with a more differentiated model. Therefore, my research aims to provide regulatory guidelines for appropriately developing more differentiated European consumer laws. In this short blog post, I further introduce this subproject within the Consumer ID project and the questions that will be asked as part of it. 

Underprotection and overprotection

Within private law, the rules that apply depend on the statuses of the persons that are involved – or, in other words, the capacities in which they act (Reich 1974). A contract between two businesses is (partly) governed by different rules than a contract between a consumer and a business. This differentiation is prompted by the idea that the consumer is the weaker party and therefore in need of protection. However, because people are different, not every consumer needs the same protection. Even if consumers are in exactly the same situation, the protection they need can vary due to their individual preferences, skills and vulnerabilities. For example: a consumer who considers buying a bike for cycling in the mountains needs different information about that bike to make a well-considered decision than a consumer who considers buying the same bike, but intends to cycle on the flat. 

As already mentioned, the consequence of the one-size-fits-all model of European consumer law is that some consumers suffer from underprotection, while others enjoy overprotection. Underprotection means that a consumer is entitled to less protection than he actually needs to be able to pursue his own goals. Underprotection for instance occurs when the right to withdraw from a distance and off-premises contract does not offer a consumer sufficient means to make an informed and well-considered decision. In contrast, overprotection means that a consumer is entitled to more protection than he actually needs to be able to pursue his own goals. Overprotection for instance occurs when a consumer has the right to withdraw from a contract without really needing it, or when he is not allowed to make a risky financial investment although he has a lot of savings (compare Reich 2017). 

Reassessing the one-size-fits-all model

Since “to legislate means to generalize” (Busch 2019) it is basically impossible to completely tailor consumer protection to individual needs (compare Helberger e.a. 2021). Under- and overprotection is therefore to some extent inevitable. However, it should still be avoided as much as possible, and therefore it is important to reassess the one-size-fits-all model of European consumer law. To do so, the first question that will be asked as part of this research project is exactly how one-size-fits-all European consumer law is. This question will be answered by assessing how differentiation is currently operationalized within European consumer law. To a large extent that is done through the recognition of different statuses and consumer benchmarks, but perhaps it is also done in other ways that have been overlooked so far. European consumer law might therefore be less one-size-fits-all than often suggested. 

The second question that will be asked as part of this research project is how more differentiation could potentially be operationalized. Of course, more statuses could be recognized, like that of the prosumer – a consumer or small business that acts on the supply side of a market (Mak 2022). But there are probably also other valuable ways in which more differentiation could be operationalized, like introducing more standards (Black 2008), focusing more on the characteristics of a transaction (Cafaggi 2013), and using big data analytics and machine learning to personalize law (Busch & De Franceschi (red.) 2020).

The third question that will be asked as part of this research project is what exactly can be gained by more differentiation and what can be lost. What is, in other words, the optimal level of differentiation? As already mentioned, more differentiation can reduce the under and over-inclusiveness of European consumer law, but more differentiation probably also comes at a cost. The downside of differentiation is often fragmentation. More differentiation could make European consumer law harder to administer and could also lead to more legal uncertainty. Moreover, depending on the specific operationalization of differentiation, it could also be at odds with the principle of equal treatment. 

Taken together, the goal of this research project is to develop regulatory guidelines for the operationalization of more differentiation in European consumer law and to illustrate their functioning within a specific context. Hopefully, this will eventually inspire the European legislator to do more justice to consumer heterogeneity.