Volume 28 - Issue 1

This Article examines a phenomenon I call complexity profiteering, in which firms add needless complexity to extract profit without adding value. A popular proposed solution to complexity profiteering is design-specific regulations such as bans on parts pairing, bans on the sale of product features such as heated car seats by monthly subscription, or mandatory USB- C charging ports to be included on all smartphones. I argue that these solutions, which I call complexity prohibitions, often undermine the fight against complexity profiteering. Empirically, prohibitions are circumvented in the short run and become self-defeating in the long run, as iterative cycles of bans and workarounds ultimately drive regulators toward micromanaging product design. Such micromanagement expands exploitable complexities and raises consumer prices. Sequential game-theory models show how compliance costs accumulate and get passed on to consumers, disproportionately harming small firms. Normatively, the Article challenges existing works’ frequent and easy appeals to democracy. Consumers’ stated preferences for repairable products contradict their revealed preferences because they overwhelmingly purchase sleeker, harder-to-repair devices. When markets already supply both repair-centric and beauty-centric designs, uniform design mandates in favor of repairability tend to impose minority preferences on a majority. Moreover, the costs of misguided design micromanagement are much higher than the costs of mistaken consumer choices. Market errors are typically narrow and quickly reversible once consumers start to buy different products. In contrast, regulations that micromanage product design and inadvertently outlaw useful designs or technologies are far-reaching, sticky, and slow to unwind. Instead of complexity prohibitions, the Article proposes a demand-side, information-first alternative: help consumers vote with their wallets. A state-hosted Buyer Beware Platform (BBP), linked to products at the point of sale via QR codes, would crowdsource information and verify signals of complexity profiteering, using AI-assisted summaries to avoid information overload. Transparent, accessible information would reintroduce competitive discipline, break the cost spiral modeled in Part I, preserve consumer choice, and remain cheaper than the perpetual enforcement of design-specific rules. Where market competition is unavailable—for example, single- supplier agricultural equipment—targeted regulation remains necessary. This Article does not argue for anti-regulatory maximalism, but instead argues for regulatory pragmatism. As Part I explains, regulations narrowly tailored to specific, verifiable objectives remain effective and appropriate, and this Article’s critique is directed at complexity prohibitions specifically. I argue for information tools that harness market correction when feasible and reserve micromanagement for true edge cases.

An algorithm, not a person, can now determine whether we get bumped from an oversold plane, wait two hours on hold, pay a surcharge that others don’t, or suffer a wide array of other consumer harms large and small. Businesses make these decisions based on an endless stream of data points about each one of us, using our behavioral quirks and vulnerabilities to make increasingly accurate predictions about our future behavior. Scholars in law and other fields have shown persuasively how such tools can reproduce and even worsen existing patterns of discrimination. They are correct to sound the alarm. But the existing literature devotes much less attention to the worrying prospect that our list of groups in need of protection— those persistently on the losing end of marketplace decisions— may now be woefully incomplete. This Article seeks to broaden the scope of our concern, explaining how these same algorithmic tools can create new, and in some ways more invisible, patterns of discrimination and disadvantage. Even more worrying, members of the new harmed groups may not realize that such groups exist as “groups” at all, or that they are members, hobbling their ability to join forces and fight back. Yet from the business point of view, these groups are very real, be they people with low self-esteem, introverts, or late risers, among innumerable other categories known and unknown. Drawing from scholarship on privacy law, consumer protection law, civil procedure, and social theory, this Article argues that the invisibility of these new harmed groups has troubling implications for distributive justice and democratic deliberation. The argument proceeds in two parts. First, I take the position that as long as such algorithms function without any meaningful chance of accountability, they impose a democratic harm on the entire polity. This is because the norms we use to assess the fairness of a given distributive mechanism aren’t independent of empirical reality. Rather, we update and apply our norms in response to our shared understanding of what’s happening on the ground—or at least, as I argue, that is how the deliberative process ought to work. The invisibility of these algorithmic tools short-circuits the mechanisms we would otherwise use to ensure oversight of emerging technologies and their uses in the marketplace. I further explain why giving members of the new harmed groups the opportunity to communicate among themselves would be essential for any such deliberative process. Second, I argue (perhaps counterintuitively) that litigation could play a crucial role in kickstarting this sort of democratic deliberation. Before more “classically” democratic modes of engagement can fulfill their potential, we may need the coercive power of the courts to help uncover what precisely is happening. Our legal system provides us with helpful procedural tools to shed light on these collective harms, but only if we use and refine them strategically. In particular, we must ensure our system of aggregate litigation remains able to surface and redress new patterns of harm where they occur. Only by giving the new harmed groups the chance to mobilize against the market logics that created them, empowering them to pursue collective action and articulate both moral and legal claims, can we stop market actors from dividing us all into winners and losers on whatever basis they choose.