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Consumer Consent Regulation

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  • Roland Strausz

Abstract

Consumer consent regulation is the cornerstone of modern data privacy regulation such as the European GDPR and the Californian CCPA. By ensuring that consumers can reject any harmful data collection, the regulation seems an effective tool for protecting consumers against price discrimination. By contrast, I provide the insight that consent regulation alone is ineffective because it provides firms with the loophole to commit to unattractive offers to dissenting consumers. Effective consent regulation therefore requires an explicit regulation of the firm's dissent offer. This is informationally demanding; regulation that merely insists on ``reasonable'' (sequential rational) offers is ineffective.

Suggested Citation

  • Roland Strausz, 2024. "Consumer Consent Regulation," Berlin School of Economics Discussion Papers 0053, Berlin School of Economics.
    • Handle: RePEc:bdp:dpaper:0053
    DOI: 10.48462/opus4-5654
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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