Homo economicus or bounded rationality? AG Emiliou on the average consumer benchmark (C-646/22) Image by Freepik

Homo economicus or bounded rationality? AG Emiliou on the average consumer benchmark (C-646/22)

On 25 April 2024, Advocate General Emiliou delivered his long-awaited opinion on the question of whether the average consumer should be seen as a homo economicus or as an individual with bounded rationality.


For quite some time now, consumer law scholarship has shown discomfort with the way in which the average consumer benchmark has been interpreted by the Court of Justice (CJEU) (e.g. Incardona & Poncibo 2007Duivenvoorde 2014Bouwman 2023). Behavioural sciences reveal that people are boundedly rational, while the average consumer, at least to some extent, seems to resemble a person who acts like a homo economicus, meaning that he or she reads all relevant information, is not influenced by the ‘choice architecture’ of a decision, and weighs the utility of all options. In a case concerning the interpretation of Article 8 of the Unfair Commercial Practices Directive (UCPD), the Italian Council of State asked for a preliminary ruling specifically to determine whether the average consumer benchmark should be extended so that consumers can be considered to act with bounded rationality. This led to quite some excitement amongst academics. 

One could say many things about the average consumer benchmark, how the Italian Council of State framed its preliminary question, and the relevance of the other preliminary questions. Yet it is probably better to save these points for when the CJEU has issued its judgment. In this blog post, I will only focus on AG Emiliou’s opinion on the preliminary question concerning the concept of the average consumer and provide a short analysis as a prelude to the judgment.

AG Emiliou’s opinion

In short, the Italian Council of State asked whether ‘the concept of “average consumer” […] – given that it is vague and flexible – [should] be worded according to the best science and experience and thus refer not only to the classic concept of homo economicus, but also to the findings of the [theory of] bounded rationality […].’ In answer to this question, AG Emiliou notes that the term ‘homo economicus’ has never been used by the CJEU and is also not mentioned in the UCPD. Instead, scholarship has concluded on the basis of neoclassical economic thinking that the CJEU’s interpretation of the average consumer resembles the homo economicus. However, according to AG Emiliou, this is not necessarily true. According to him, the average consumer benchmark is flexible enough to resemble the homo economicus in some cases and include someone who is boundedly rational in others. To support this conclusion, AG Emiliou presents five arguments.

Firstly, the AG notes, Recital 18 of the UCPD expressly states that the average consumer concept depends on the evolution of the case law and that social, cultural and linguistic factors should be taken into account when defining it. Therefore, the average consumer is a flexible concept. Secondly, the same recital indicates that the average consumer is a typical consumer, which is something different from the rational consumer in economic terms. That the average consumer is reasonably well-informed and reasonably observant and circumspect does not mean that he or she is perfectly well-informed and perfectly observant and circumspect. Furthermore, the fact that the UCPD also contains a vulnerable group benchmark does not imply that the average consumer is rational in the neoclassical economic meaning. Thirdly, the fact that the UCPD aims to offer a high level of consumer protection shows that the average consumer should not necessarily be interpreted as economically rational. Otherwise, he would not have needed much protection. Fourthly, an assumption that the average consumer will act rationally as long as he is sufficiently informed cannot be inferred from the previous case law. Lastly, the fact that the UCPD aims to protect a consumer’s ability to make informed decisions also does not imply that the consumer, but for the ‘unfair’ commercial practice, would necessarily have made an informed decision as a homo economicus would. 


One of the questions this opinion raises is how likely it is that the Court will follow the AG’s advice. I think there is a significant chance that the CJEU will also find the average consumer concept to be flexible, meaning that its interpretation depends on the case at hand. Perhaps the CJEU will also try to debunk the idea that the average consumer acts like the homo economicus. Looking at the CJEU case law, one could easily argue that quite some aspects of the average consumer resemble the homo economicus. Take, for instance, the Mars case of 1995 in which the court ruled that the average consumer “may be deemed to know that there is not necessarily a link between the size of publicity markings relating to an increase in a product' s quantity and the size of that increase.” However, it is also obvious that there is not a perfect match between the average consumer and the homo economicus, at least in more recent judgments. For example, in the widely discussed Teekanne case, the CJEU ruled that a list of ingredients “may in some situations not be capable of correcting sufficiently the consumer’s erroneous or misleading impression concerning the characteristics of a foodstuff that stems from the other items comprising its labelling.” 

Nevertheless, I am not convinced at this point that the CJEU will fully concur with the AG that the average consumer benchmark should be extended to situations in which the consumer should be perceived as an individual with bounded rationality. The flexibility of the average consumer benchmark, emphasized by AG Emiliou, might enable national courts to offer more protection if needed in a particular situation. However, I do not find it likely that the CJEU will create an opening here with specific reference to the term ‘bounded rationality’. As noted by AG Emiliou, ‘bounded rationality’ is not a term that has been used by the Court before or has been referred to in the UCPD. Furthermore, it is also a loaded term. The term ‘bounded rationality’ was first used by Simon in 1957 and became popular through the work of Kahneman and Tversky. According to Gigerenzer, Kahneman and Tversky misused the term because they mistakenly took economic rationality as the benchmark for human decision-making and thereby attached an overly pessimistic view of heuristics and human rationality to it. 

In connection to the above, it is interesting that AG Emiliou does not discuss how the concept of bounded rationality could be operationalised if a court concludes that the average consumer should be perceived as subject to bounded rationality in a particular context. In the Gut Springenheide case, the CJEU ruled that, in general, a national court can make a normative assessment as to whether a commercial practice is misleading or not through the average consumer benchmark. Alternatively, a court is free to order an expert’s opinion or commission a consumer research poll. However, this rarely happens in cases that are not about intellectual property law (Dinwoodie & Gangjee 2014). One reason why quite some academics argue that the average consumer should, at least in certain cases, take account of bounded rationality is that it would make EU consumer law more evidence-based. However, if courts would be allowed to operationalize the concept of bounded rationality themselves this would not necessarily lead to more evidence-based consumer law. For the average consumer benchmark to actually become more evidence-based the CJEU would have to clarify under which circumstances courts could – or even would be obliged to – use empirical evidence on consumer decision-making. Furthermore, an interesting question would be how courts would have to incorporate such empirical evidence into the, at least to some extent, normative concept of the average consumer. The Court has left this open in the Gut Springeheide case, but providing more guidelines on this might help national courts to use more empirical evidence.


It remains to be seen whether the CJEU’s answer to the preliminary question of the Italian Council of State will actually lead to the outcome that a lot of academics are hoping for. Yet if the Court, just like AG Emiliou, emphasizes the flexibility of the average consumer benchmark that in itself will be a good step forward. To what extent national courts interpret the average consumer benchmark as flexible within the discretion given them by the CJEU in the Gut Springenheide case, is one of the questions asked by a collective investigation project led by Anne-Lise SibonyMateusz Grochowski and Fabrizio Esposito. I am also part of this academic project and we hope to present our findings later this year.