Government Regulation - Introduction

If you know yourself and your customer, consistently practice relationship marketing, always under promise and over perform, and behave ethically at all times, you will probably stay out of jail and avoid serious legal liability arising from your business dealings. If not, you could be in big trouble. Not only because you are a bad businessperson and poor manager, but also because you could cost your firm a lot of money and maybe even go to jail. This block of instruction is concerned with the things that could get you into big trouble.

So far as exchange is concerned -- between you and your customers and suppliers, etc. -- public policy as manifested by law is concerned about preventing bad acts. Kotler (see assignment) says, that law in this area has three purposes:

  1. To protect consumers from unfair business practices;
  2. To protect companies from unfair competition,
  3. To protect society from unbridled business behavior.

BOMFOG!

OK, this statement isn't exactly wrong. Public policy does try to protect consumers; by protecting consumers it may protect ethical companies from unscrupulous competitors; and in doing so it must restrain (regulate) business behavior (otherwise why bother?) The problem with the Kotler statement is that it is simply not very informative. What after all is "fair"? Arguably, U.S. law is not about fairness or justice, but order and, sometimes, as a consequence, efficiency. Nevertheless, people who don't want to be sued or go to jail should think about fairness (as should the people doing the suing or prosecuting)

 

There are two kinds of law:

Criminal -- concerned with punishing, incapacitating, and deterring criminal behavior [murder, manslaughter, rape, robbery, fraud]

Civil -- primarily a means of conflict resolution; it is an aid to negotiation, and a supplement to negotiation when negotiation fails

The fact is that if people think that they have been treated unfairly and that the unfair treatment has resulted in injury, they will try to sue the perpetrator (perp) or put him or her in jail. If they have a legal cause of action, standing, and can get the case to a jury and the jury agrees that the defendant/respondent (perp) has behaved badly (unfairly) the perp may be ordered to stop doing whatever they were doing, pay damages (which may include punitive damages), pay a fine, or be sent to jail.

Injured parties (plaintiffs) can take the perp to civil court where they may obtain ether injunctive relief (the perp is ordered to stop doing whatever) or damages (the court orders the perp, or his insurance company, to pay money to the plaintiff).

Or, injured parties can make a complaint to the authorities (the police, district attorney or attorney general, or a magistrate). The matter will be investigated and, if a crime is found to have been committed, the perp will be arrested and eventually tried in a criminal court.

 

What Courts DO

1. Courts settle disputes. A court must decide the dispute that is before it.

2. A court can decide only the particular dispute that is before it.

3. A court will decide the particular dispute (or explain its decision) according to a general rule which covers a whole class of like disputes.

4. The court making the decision has some latitude (sometimes great latitude) in the selection and application of a general rule.

Whether a case ever gets to court will largely depend upon the black letter law (written down in a book of statutes or appellate court decisions). Black letter law will also affect the eventual outcomes, especially on appeal. But, subject to the constraints imposed by the black letter law, the disposition of a case will usually turn upon a trier of fact's (sometimes the judge; in a jury trial, the jury) notions of fair dealing (and the more powerful the defendants appear, the higher the standard of behavior they will be held to). You should always keep this in mind -- to a very real degree, the law is what your neighbors (especially those who don't avoid jury duty and who welcome the prospect of being a juror) think it should be.

However, we won't talk much about fairness here. Frankly, we don't know anymore about the subject than you do. Rather we will talk about the black letter law, about order, and a little bit about efficiency. The fundamental logic of the law is not fairness of procedure, although that is important, nor even justice, but order. As long as the rules and procedures governing relationships are known ahead of time and consistently applied, it rarely matters what they are. This is the unambiguous moral of the Coase theorem. We simply accept the distributional consequences of rules as facts of life. We implicitly recognize that those consequences are usually less onerous than remaking the rules at each play of the game.

The validity of this perspective is probably intuitively obvious to anyone who can remember what children's' games were like. Remember how much time was spent wrangling over rules and bickering about events? Each of us was caught up in winning, and devoutly wished to avoid conceding an edge to our opponents, yet more than anything we wished in vain to get on with the game. The advantage of adult supervision, like the law, is that it permitted us to do so, to devote our energies to doing what we wanted to do rather than wasting them fighting about the rules. This point however seems to be lost on many lawyers and political scientists. Perhaps, because the kids who could shout the loudest and who therefore won most of the arguments grew up to be lawyers and the ones who liked arguing better than games grew up to be political scientists. For most of the rest of us participation in rule making was always a burden, not a benefit.

What the Law Regulates

So far as market exchange is concerned, U.S. law is concerned about preventing the following kinds of bad acts: conspiracy to fix prices or divide markets, predatory practices, fraudulent or deceptive practices, and the failure of a "duty of care" in the design, manufacture, or sale of a product. The first of these is the domain of antitrust law, as is the second, the third is the domain of consumer protection law, and the fourth of product liability law. In addition, the law also directly regulates exchange across borders (a topic we will discuss in greater detail later in the course) and sales of goods and services directly to or on behalf of government (a topic we will say relatively little about here).

Antitrust

The Sherman Act is the core of American antitrust law. It is short and simple.

sec. 1. Every contract ... or conspiracy in restraint of trade ... is herby declared to be illegal. Every person who shall ... engage in any such combination or conspiracy, shall be deemed guilty of a [crime]...
sec. 2. Every person who shall monopolize, or attempt to monopolize, or ... conspire ... to monopolize any part of the trade or commerce ... shall be deemed guilty of a [crime]...

Note that at least two persons (legal persons -- not necessary human beings; the legal process of creating a virtual person is called incorporation) are required to violate Section 1 of the Sherman Act. It prohibits conspiracies to restrain trade; hence it is known as the conspiracy section. But what is a restraint of trade? Clearly, the Sherman Act is not concerned with every restraint of trade. After all, every contractual agreement binds the parties to the agreement and thereby restrains their behavior to a degree. If, for example, you make a binding contract to sell your car to Peter, you cannot turn around and sell it to Paul, just because he makes you a better offer.

Sherman Act Section 1

So, what does section 1 of the Sherman Act prohibit? The simple answer is that it prohibits the following agreements among potential competitors at the same level of commerce (horizontal arrangements): (1) to fix prices -- explicitly or implicitly; (2) to divide markets, or (3) to boycott a supplier, distributor, or customer. To convict someone of violating section 1 of the Sherman Act all you have to do is show that the conspiracy occurred -- it is unnecessary to show that anyone was harmed. Nor are there any affirmative defenses. Economists and judges have come to agree that these behaviors have few if any redeeming characteristics.

However, section 1 of the Sherman Act also prohibits the following agreements among firms at different levels of commerce (Vertical arrangements):

Resale price maintenance agreements,
Tying arrangements (may also violate Clayton Act),
Exclusive dealing arrangements (ditto),
Requirements Contracts (ditto),

But only if they can also be shown to have resulted in harm to consumers on balance (more harm than good -- this is called the Rule of reason as clarified by the Hart-Scott-Rodino Antitrust Improvement Act of 1976 -- HSR).

Another way of explaining this rule is to say that the courts tend to look favorably upon vertical arrangements where they are a means of differentiating products or segmenting markets but not where they are merely intended to facilitate first or third degree price discrimination. The practical problem with this formulation is, of course, that it is often nearly impossible to say where mere price discrimination ends and product differentiation or market segmentation begins.

Sherman Act Section 2

Section 2 of the Sherman Act prohibits monopolization. Monopolizing can accomplished by one legal person with intent to drive competitors out of business, by one firm acquiring another, or by the merger of two firms.

Let us look at mergers first. Mergers are also governed by Section 7 of the Clayton Act, which prohibits mergers likely to injure competition. For along time, the courts interpreted that to mean any merger that reduced the number of competitors in a given market. Moreover, the courts defined markets very narrowly. This meant that for a long time horizontal mergers (among actual competitors at the same level of commerce) were effectively prohibited. Some vertical mergers were too. The only kind of mergers that escaped legal scrutiny were conglomerate mergers (between firms in different lines of business). For more than twenty years, merger law has been changing.

Now, instead of playing "gotcha" -- waiting till after consummation of the merger and then suing, the Mergers & Acquisitions section of Antitrust Division of the US Department of Justice (DOJ). requires prior notification of the urge to merge and a waiting period. If the DOJ takes no action prior to the close of the waiting period, the merger is OK. It can be carried out without fear of subsequent litigation. Moreover, the DOJ has issued a set of guidelines identifying the kind of mergers that are acceptable (all conglomerate mergers, most vertical mergers, and many horizontal mergers), those mergers that will be given further scrutiny (some horizontal mergers), and those mergers that are strictly prohibited (except where one of the partners is failing). Furthermore, the cutoff points are strictly quantitative, based as they are on the Herfindahl-Hirschman Index (HHI), which is equal to the sum of the squares of the market shares, in percentage terms, of each of the participants in the market. The HHI for a monopoly is 10,000; for perfect competition 0 (i.e., HHI|1 firm = 100 squared = 10,000; 2 equal firms = 50 squared + 50 squared = 5,000; 10 equal sized firms = 1000; 100 equal sized firms = 100; the bigger the HHI the closer the scrutiny given to the merger). Horizontal mergers with a post merger HHI of 1000 or less are OK; between 1000 and 2000 it will depend on how much the merger increases the HHI (>100 not OK); above 2000, forget it.

ANTITRUST SINCE the Hart-Scott-Rodino Antitrust Improvement Act of 1976

What changed (about twenty years ago)? The simple answer is HSR. Before HSR, antitrust was incoherent. Anticompetitive was defined two different ways: hurting consumers and hurting competitors. Many things that benefit consumers (like lowering prices) harm competitors and vice versa. Prior to HSR, the courts identified a lot of things that hurt competitors as anticompetitive or predatory behavior -- including horizontal mergers that enhanced the competitiveness of the merged firm vis á vis others. HSR redefined competition in terms of market efficiency and anticompetitive in terms of inefficiency. Consequently, the courts have identified damaging consumer welfare as the "bright line test" used to identify violations of the antitrust laws (NCAA v. Universities of Oklahoma and Georgia and Aspen Ski v. Aspen Highlands).

New Approach to Vertical arrangements

The Supreme Court long held that resale price maintenance (RPM), where a manufacturer sets and enforces a minimum (or maximum) resale (wholesale or retail) price for its product, was a per se violation of the Sherman Act (Dr. Miles Medical Company v. John D. Park & Sons Company, 1911) -- pure predatory behavior.

This reasoning presumes that manufacturers have no legitimate reason to want higher retail prices, since higher resale margins reduce the manufacturer's profit. It is, therefore, a manifestation of an anticompetitive conspiracy: (1) among manufacturers, where RPM makes it easier for a cartel to monitor each other's prices and reduces incentives for cheating, (2) among colluding dealers, where it is used to compel a manufacturer to act as an enforcer for the dealers' cartel.

Economists and many federal antitrust officials have long criticized this approach to vertical arrangements. They argue that vertical restraints, including rpm, are nearly always beneficial to consumers: (1) "principal-agent" problem, (2) contracts between manufacturers and dealers solve this problem. DOJ's (1982) guidelines on vertical restraints declared most agreements between manufacturers and dealers OK where: (a) manufacturer controls less than ten percent of the market, (b) dealers control less than 60 percent of the market.

Following HSR, Supreme Court responded by overturning United States v. Schwinn & Co., which had outlawed exclusive dealing arrangements in Continental TV v. GTE Sylvania [1983]; ruled that predatory behavior could not be inferred from evidence that a manufacturer terminated a price-cutting distributor after complaints from distributor's competitors (Monsanto Company v. Spray-Rite Service Company [1984]); held evidence of an agreement to terminate another dealer because of price cutting was not predatory (Business Electronics Corporation v. Sharp Electronics Corporation [1988]).

The other kind of monopolizing prohibited by section 2 of the Sherman Act is harder to explain, to recognize, or to avoid. It requires both an intent to drive competitors out of business and predatory behavior. It is OK to drive your competitors out of business by non-predatory behavior. It is also OK to engage in predatory behavior if it doesn't reduce competition. You (or Bill Gates) just cannot do both. The problem is figuring out what predatory behavior is. This issue is complicated by the fact that a lot of things that were defined as predatory behavior before HSR, now may not be. For example, competing in terms of price and or product is not predation. Behavior that coerces consumers is; and so are a lot of other things that just look nasty. So, for example, when Bill Gates appears mean, nasty, and ruthless, drives his competition out of the market, and in so doing he hurts consumers, he is monopolizing. Or, so courts have recently held. The courts will tell us more about what this means eventually, but don't hold your breath. (Click here to read the Court's finding of fact on this case; here to read about DOJ's case; here to see an amusing response, here to download a critical analysis of the case.)

Procedure under the Sherman Act

Criminal case must be brought by US Department of Justice. Defendant can plead: (1) not guilty, (2) guilty, or (3) nolo contendere. Criminal conviction is prima facie evidence for civil suit. Penalties for violating Sherman Act are up to 3 years in federal prison and/or a maximum fine of $350k (for each count) for individuals and fines of up to $1M (for each count) for firms.

A civil case may be brought by any person (or group of persons) damaged by the offense. Suit is brought in federal court in judicial district where alleged offense occurred. Private remedies include triple damages, court costs, attorney's fees, and simple interest.

Other remedies available under the Sherman Act include: (1) divestiture, (2) injunction. and (3) Seizure of assets (RICO).

The Clayton Act

The Clayton Act, as amended by the Robinson Patman Act, Kefauver-Celler Amendments, and the HSR Antitrust Improvements Act 1976, is the other key element of American antitrust law. The Clayton Act is directed at predatory business practices and provides for civil enforcement by the Federal Trade Commission (FTC) as well as the DOJ. The Clayton Act is much more specific than the Sherman Act. For example, section 7 of the act prohibits price discrimination, which it defines as the sale of goods of like grade and quality in the same market at different prices that injures competition. Of course, since HSR the interpretation of injury to competition has changed -- the emphasis shifting from injury to competitors to injury to consumers -- but what is prohibited remains pretty clear cut. Moreover, the law specifies allowable affirmative defenses -- price discrimination is OK if it is justified by cost differences (product differentiation), is done to meet a competitors' price (inverse elasticity pricing), or involves perishable goods.

The procedures governing the enforcement of the Clayton Act and its remedies are the same as under the civil parts of the Sherman Act, plus the powers granted to the FTC under the Administrative Procedures Act (APA). Under the APA, the FTC has extensive rulemaking and adjudicatory authority, as well as enforcement authority. Consequently, it has the authority define predatory behavior and enforce its definition (subject to the scrutiny of the federal courts and the requirement that it interpret statutes in lay language explaining appropriate behavior). Its hearing procedures are supposed to be cooperative rather than adversarial; its hearings officers (administrative law judges) can, for example issue advisory opinions. Complaint can be by FTC, consumer, or other government agency. After investigation, the FTC files a formal complaint, including proposed order. Hearing held before Administrative Law Judge who issues decision. Commission may ratify decision or hear appeal. It also has the authority to issue cease and desist orders and to impose civil penalties for violations of cease and desist orders. In some cases the FTC can order firms to make positive efforts to repair damage done, e.g. corrective advertising, although it must petition Federal Courts to enforce orders.

Protecting the Consumer's Pocketbook

The FTC was created in 1914 to protect the consumer against 'unfair methods of competition," initially through the enforcement of the Clayton Act. A consumer is defined here as a person who buys goods or services for his or her own personal use (includes use by family and friends). As an aside it might be noted that DOJ enforcement of antitrust law is an example of the exercise of the police powers of the American federal government that the founding fathers would have undoubtedly understood and perhaps approved. Congress passed a law prohibiting certain kinds of activities or behaviors, the Department of Justice prosecutes violators, and judges rule on matters of law and juries on questions of fact. Note the emphasis on prohibition -- the law can be a sharp scalpel to punish wrongdoing but it is a blunt instrument with which to compel positive action.

What is Regulating?

The notion is confusing, because the term regulation has two meanings, one general, and one specific. The general meaning of the word is making orderly or organizing. Of course, commerce or business may be ordered by the government using an array of means, including direct subsidies, tax penalties, and legal ordering of property and liability relationships -- powers formally granted by the CONSTITUTION of the US to CONGRESS. i.e. the power to spend, to tax, and to borrow. Regulation also has a specific meaning, i.e. the imposition of rules by government, backed by penalties, that are intended to modify the economic behavior of firms and individuals -- this is what regulatory or administrative agencies do.

In the specific sense of the word, regulation by administrative agency usually means issuing permits.

  • The state requires firms and/or individuals to have permits in order to carry out particular activities or behaviors;
  • An administrative agency will grant a permit, if and only if firms and/or individuals agree to abide by certain specified terms, conditions, or rules -- i.e., regulations;
  • An administrative agency makes sure that nobody who lacks a permit performs the regulated activities or behaviors and enforces compliance on the part of permit holders;
  • An administrative agency sanctions violators -- imposes fines or, in extreme cases, withdraws permit.

In the 1920s, under the Wheeler-Lea Act, the FTC was charged with the regulation of "unfair or deceptive acts or practices." The Wheeler-Lea Act granted the FTC broad latitude to define its responsibilities and the power to regulate advertising to prevent "false and misleading claims." The FTC now also has responsibility for enforcing the Robinson-Patman Act, Magnuson-Moss Warranty Act, Truth in lending, Fair Credit Reporting, and Fair Packaging and Labeling Acts, Etc.

These laws prohibit selling tactics such as Bait and Switch/civil penalties, up to $5k, permit consumers to withhold payment to Holders in Due Course if good is 'unsatisfactory,' provide for 30 day return period on mail-order merchandise/civil penalties, up to $10k, and three day cooling-off period for door-to-door sales/contract must include notice of recision option and cancellation form, require consumer loan terms to be clearly laid out.

Truth-in-lending Act -- enables consumers to know the costs of credit and to compare terms. Disclosure of credit terms must be clear, conspicuous and written, and finance charges and penalties disclosed in detail, including annual percentage rate (APR). Special provisions govern open-ended credit--credit cards, revolving charges, check overdraft plans. etc.

  1. periodic statements required
  2. may only be extended on request
  3. liability for accepted credit cards only
  4. used by holder or by one authorized by holder
  5. liability for lost cards no more than $50

Other provisions govern non-open ended credit

  1. amount of payments agreed on
  2. number of payments
  3. due dates agreed on

Penalties--criminal: $5k or one year, civil recovery by consumers: 2x finance charge, $1k plus court costs and attorney's fees

Fair Debt Collection Practices Act regulates collectors of personal, family, household debts. Prohibited practices: telling employer, threats of violence, verbal abuse, threatening to take property without justification, fibbing, telephone harassment, etc. Remedies include private or class action suit for damages attorney's fees, & costs and FTC enforcement, criminal: $5k or one year in jail.

Fraudulent or Deceptive Practices

Aside from these statutory rules governing the form that contracts must take and information that must be presented to the customer (states and even local jurisdictions often have similar statutes or ordinances), American law rarely meddles in exchanges involving lawful goods and services. Indeed, the US Constitution gives considerable protection to contracts and commercial speech, which allows just about anything not involving explicit misrepresentation on the part of one of the parties to the transaction.

Commercial speech is intended to advance the economic interests of the speaker. This is the definition announced by the US Supreme Court and apparently understood by it, but is not very clear to those of us who find it more difficult to tell where politics ends and economics starts. Fortunately, there is another concept in wide usage that seems to overlap almost perfectly the court's notion of commercial speech. Commercial advertising. That commercial advertising is less protected than political advertising is obvious. For example, fraudulent or misleading commercial advertising may be and is prohibited; that is not the case with political advertising. Are these the only permissible governmental restrictions on

According to Central Hudson Gas and Electric Corp. v. Public Service Commission, 100 S.Ct. 2343 (1980), government restrictions on commercial speech that meet the following tests are permissible:

  1. A. substantial and real [public] interest is promoted by the restriction on speech:

  2. The restriction advances that interest -- question of fact.

  3. No other method of restriction or lesser restriction would be effective -- question of fact.

Indeed the fundamental law governing most market exchanges in the US is the COMMON LAW of CONTRACT. The common law of contract presumes that transactions between buyers and sellers involve a voluntary exchange of rights (considerations). The main job of the courts is enforcing those agreements. They rarely question the adequacy of consideration (i.e., second guess voluntary acts of sovereign citizens), except where there is undue influence, duress, or fraud. Although as we will see, courts may set aside transactions involving innocent misrepresentation. The exercise of undue influence, duress, and fraud give rise not only to basis of the bargain damages, however. These acts are also crimes (misdemeanors or even felonies). Fraud has six elements

  1. misrepresentation (either by commission or omission)
  2. of a material fact
  3. knowledge of the misrepresentation
  4. intent to deceive
  5. reliance on the part of the victim
  6. damage to the victim

It should be noted that mere puffing is not fraud -- tampering with a used car's odometer is fraud; claiming that it is in great shape is not. Innocent misrepresentation is not a crime -- it involves all the elements of fraud but the middle two (except where the US government is the customer). The usual remedy for exchanges involving innocent misrepresentation is rescission of the contract and restitution of consideration.

Finally, the courts will not enforce illegal contracts, unconscionable contracts, or certain contracts which are contrary to Public Policy (e.g. certain exculpatory clauses). But you need a lawyer to explain what that means.

The Institutional Preconditions of Capitalism

Respect for private property and a willingness to abide by agreements

A system of a laws reflecting those norms

Orderly and impartial enforcement of those laws

The Failure of a Duty of care in the Design, Manufacture, or Sale of a Product

The kind of civil law that is most relevant to marketing a product is TORT law. A tort is defined as "a wrongful act that results in injury, loss, or damage." Tort law resolves conflicts about who should bear the costs of damages that result from using a good or service and how that cost ought to be measured and paid.

The idea is that the wronged party should be made whole (by a money payment). Tort law spells out duties of care that people owe to each other. In the US, tort law says that manufacturers and retailers owe their customers a product that is effective for its stated purpose and safe when properly used. This means that the product must be properly designed, manufactured, and marketed to the consumer.

Failure of a "duty of care "at the sales level, usually gives rise to basis of the bargain damages -- i.e., the product or service is not as represented and does not perform as promised, e.g., it is not delivered on schedule. Basis of the bargain damages rest on a solid foundation of contract law. As noted above, this body of law assigns almost all responsibility for specification of the terms of contract to the seller, hence the seller's responsibility is straightforward, predictable, and usually limited to the 'lost' or missing value of the defective goods sold.

Somewhat more serious issues arise where use of the good in question gives rise to consequential damages. Where these take the form of property damage or indirect economic loss, legal problems are often not too severe. Resolution will usually be based on questions of fact: the scope and domain of warranties, express or implied (cf. merchantability and fitness, disclaimers). The key uncertainty involved here is where, in the chain of distribution, liability for damages will come to rest.

Personal injury is another matter altogether and a much more serious game, involving far higher stakes. Who may sue? Anyone injured. The only requirement is that the injury involves the use of a product. Who may be sued? Anyone owning the product, using the product, or involved in the chain of distribution (generic products--all makers). Or any and all of the above. Where may the plaintiff sue? In diversity cases, under the most advantageous state laws. Who may be liable? Joint and several liability, does not require concerted action. Who will pay? Any unsuccessful defendant who can.

There are several personal injury theories that will get a product liability case to a jury, two of the most common are:

  • Strict liability: failure to warn of a defective design (something that could be corrected -- i.e., exploding dryer) or defective condition (ladder; hockey puck?);
  • Negligence: failure to: manufacture or handle the good properly, adequately inspect the good, comply with federal, state, or industry product standards. (Violating law is usually proof of negligence per se)

Businesses have several defenses?

  • Abnormal use
  • Contributory negligence
  • Assumption of risk

To avoid LIABILITY under a strict liability standard, the defendant must show that the plaintiff "voluntarily and unreasonably proceeded to encounter a known danger."

One problem here arises out of the confusion between tort liability and contract (or promissory liability) theories under a caveat venditor system which appears to be trending to strict liability. Strict liability differs from promissory liability precisely because the latter is based on a promise, explicit or implied. Strict liability differs from negligence because fault is not involved, yet it becomes mixed up with negligence in failure to warn and design defect cases brought under section 402a of the restatement on torts. The effect is to render the outcome of putting a product into the stream of commerce highly unpredictable -- disorderly or unregulated -- which negates the main purpose of U.S. law.

Some proposed solutions for the disorderly nature of product liability law governing consequential damages involving personal injury.

  • Adopt a strict liability standard that makes the producer liable on a no-fault basis for all consequential damages associated with the use of the product, but schedule awards, excluding or limiting recovery for pain and suffering, with the plaintiff able to opt out of this system in cases of gross negligence (this is how workers' compensation systems work in most US states)
  • Leave the law alone but limit recovery for pain & suffering
  • Award punitive damages to court and not to plaintiff
  • Revert to 'no liability without fault rule'
  • Apportion financial responsibility according to degree of fault
  • Adopt federal product liability law (to prevent forum shopping)
  • Insuring the consumer, not the seller

For the most part, the plaintiff's bar doesn't think there is a problem.