Balancing Rationality And Reality: Insights From The CJEU's Compass Banca Judgment

On 14 November 2024 the Court of Justice of the European Union (CJEU) delivered a judgment addressing a cornerstone in European consumer protection law: the pivotal concept of the "average consumer". The case arose from a dispute involving Compass Banca's commercial practices, where bundled personal loans and insurance policies raised questions about consumer deception. The Italian Consiglio di Stato posed preliminary questions to the CJEU, most notably asking whether the "average consumer" standard should incorporate insights from behavioral economics, particularly cognitive biases such as framing effects, which can influence decision-making. The CJEU's judgment does not revolutionize European consumer protection law, but it does set the stage for heightened scrutiny of how modern marketing strategies may manipulate consumer behavior.