Consumer protection refers to measures, systems and organizations set up to protect the rights of consumers while participating in the marketplace economy. This commonly involves laws and regulations to prevent any exploitation of the consumers by businesses selling their products to the consumers. In some cases, it involves making sure that there is competition in the marketplace to discourage unfair practices by businesses such as high prices because of no apparent competition in an industry or price fixing by a group of producers.
Consumer protection emerge in the 20th century from the various consumer movements meant to promote and safe guard consumer protections. This was a result of the undue power businesses had garnered and profit minting shortcuts these ventures had invented. Consumers were exploited by the corporations by way of high prices, unsafe products or competition stifling business practices.
Consumer protection seeks to empower the consumer with correct information about the products available in the marketplace. Giving more information to the consumer generally leads to a more informed decision making process when choosing what to buy. To protect the consumer, measures have to be put in place inform of laws and regulations to prevent wrong claims about products by businesses from being spread while forcing these businesses to disclose any useful information they may be hiding such as side-effects of a products. The general assumption is that, correctly informed consumer makes rational and appropriate choices that benefit the society eventually.
Consumer protection also sets up systems where complains and violations of consumer rights can be taken to. These systems have a procedure that can be followed to seek redress in case of an issue. More and more countries have set up organizations mandated with protection of the consumers and enforcement of laws that safe guard these rights. These organizations regulate what products are available in the marketplace and amount of information businesses have to give to the consumer besides the usually advertising claims and slogans.
Consumer movement organizations have also set up a system of testing various products available in the market and ranking them so that they can recommend the best product for each segment of the consumer. This ranking and recommendation process makes the businesses strive to make better products overall and lower prices which helps consumer in the end. These movements do not have a vested interest in the success of any particular product and hence their approval is free from unjust claims or bias.
Lastly, consumer protection comes when their clear competition in the marketplace and no colluding by businesses to fix prices. Therefore, consumer protection is often associate with competition laws that prevent any single business entity from gaining monopolist powers or abuse of a dominant position. In some extreme cases, businesses have been broken up into smaller independent corporations to ensure that they compete against each other to prevent from abusing rights of consumers.
The emergence of a strong consumerism global economy has led to the need for consumers to be protected from any unfair practice in the marketplace. This movement is only going to grow stronger in response to the bigger and bigger businesses looking for ways to make money at the expense of the consumer welfare.