{"id":779,"date":"2025-05-09T17:23:46","date_gmt":"2025-05-09T17:23:46","guid":{"rendered":"https:\/\/poderemercado.com.br\/?p=779"},"modified":"2025-05-09T17:23:47","modified_gmt":"2025-05-09T17:23:47","slug":"lei-do-consumidor-ou-arma-contra-o-mercado","status":"publish","type":"post","link":"https:\/\/poderemercado.com.br\/en\/lei-do-consumidor-ou-arma-contra-o-mercado\/","title":{"rendered":"Consumer law or weapon against the market?"},"content":{"rendered":"

The rhetoric of consumer protection has become ubiquitous in Brazil. Any attempt to question rules, limits or regulations is quickly framed as an \u201cattack on citizens\u2019 rights\u201d. However, the political use of this legislation \u2014 originally designed to balance asymmetries between supplier and customer \u2014 reveals a dangerous distortion: Consumer law has often come to function as a weapon against the market itself.<\/strong><\/p>\n\n\n\n

It makes services more expensive, makes small entrepreneurs unviable, stifles innovation and transfers power to the bureaucracy and large groups that have learned to use the State as a shield against competition.<\/p>\n\n\n\n

Before delving into this debate, it is worth revisiting two reflections already published here on the blog. The first deals with the way in which the State uses regulation to protect inefficient sectors from real competition \u2014 see the article The Regulation Fetish<\/strong><\/a>. The second shows how bureaucracy has become an obstacle to innovation, especially for small entrepreneurs \u2014 find out more at Entrepreneurship in Brazil: where bureaucracy is the biggest competitor<\/a><\/strong>.<\/p>\n\n\n\n

In this article, we will show how the discourse of protection has become a control mechanism, how poorly designed regulation harms development and why consumer protection has become a justification for maintaining privileges and inefficient state structures.<\/p>\n\n\n\n

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The rhetoric of protection and the practice of coercion<\/h2>\n\n\n\n

It\u2019s not hard to find examples. A local bakery that wants to sell takeout meals must comply with health and regulatory requirements that consume time and money. An informal mechanic, even with a good reputation, is fined for not having a \u201cvisible sign\u201d for customer service. A technology company cannot launch a new service before complying with all the local Procon standards, even if it has voluntary approval from its customers.<\/p>\n\n\n\n

These are not isolated cases. They are symptoms of a system that has become using consumer protection as a justification for maintaining a closed, insecure economic environment that is hostile to freedom of choice.<\/strong><\/p>\n\n\n\n

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The trap of well-intentioned regulation<\/h2>\n\n\n\n

According to the column Law and Economics<\/em> from the magazine Look<\/em>, the excess of laws and regulations, even when well-intentioned, ends up create a legal and institutional environment inhospitable to innovation<\/strong>. Entrepreneurs start spending more on lawyers than on development. Innovative services are no longer launched for fear of lawsuits. And consumers lose what they should have most: alternatives.<\/p>\n\n\n\n

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\u201cBy hindering the emergence of innovative business models, protective legislation can end up preventing consumers from having access to better products and services at more competitive prices.\u201d
\u2014 Veja \u2013 Disguised Protectionism and the Innovation Trap<\/a><\/p>\n<\/blockquote>\n\n\n\n

The article warns: it is not the market that is becoming hostile to the consumer. It is the law that, in trying to protect the consumer from everything, prevents him from choosing for himself.<\/strong><\/p>\n\n\n\n

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What IPEA says: poorly designed regulation affects growth<\/h2>\n\n\n\n

The Institute of Applied Economic Research (IPEA) has published an extensive study on the effects of regulation on development. Chapter 6 of the book Institutions and Development in Brazil<\/em> analyzes how regulatory governance in the country has created barriers to productivity, investment and free enterprise.<\/p>\n\n\n\n

Some key points of the study:<\/strong><\/p>\n\n\n\n