Personalizing EU Private Law. From Disclosures to Nudges and Mandates

A key problem in EU private law is actor heterogeneity. While special rules exist for certain subgroups of actors, for example consumers or retail investors, the members of these legal categories still exhibit vast differences in behaviour, degrees of rationality, vulnerability, and economic endowment. Therefore, private law stands much to gain from tailoring its regulatory apparatus to the individual addressees. This article draws on behavioural economics and Big Data analytics to develop a comprehensive framework for the personalization of EU private law across different regulatory tools such as disclosures, nudges, and mandates. Hitherto, in market settings, data mining techniques have almost exclusively been used by tech-savvy companies. The time seems ripe for lawmakers to use digital technologies in order to take European market regulation one step further. By harnessing Big Data techniques, laws can be tailored to individual characteristics of addressees; the relevant parameters could then be stored and updated in a “legal blockchain.” Through the use of different metrics and pseudonymization, the right to privacy, a key feature of European law in the digital age, can ultimately be respected. The article shows how laws can be personalized in a variety of different settings. Examples range from the salience and complexity of disclosures in consumer and investment law, to default caps on overdraft charges, debiasing optimism bias, and usury laws. Finally, it is argued that personalization can inspire a novel theory of legal categories which transcends the traditional, status-based dichotomies of, for example, “consumer-seller” or “retail-professional investor.” By providing a tool for making empirical distinctions, which affect the impact of laws, legally relevant, personalization thus ultimately serves equality before the law