European Court of Justice : Compass Banca and the notion of ‘average consumer’

On November 14, 2024, the Court of Justice issued a significant ruling in the Compass Banca case, redefining the "average consumer" standard under EU consumer law. Traditionally described as "reasonably well-informed, observant, and circumspect," the Court clarified this definition to include the impact of cognitive biases and decision-making constraints. It emphasized that consumer behavior must be assessed realistically, acknowledging factors like bounded rationality and heuristic decision-making. Practices exploiting these biases may breach the Unfair Commercial Practices Directive (UCPD) if they significantly distort consumer consent. The Court also underscored the need for clear and transparent information to prevent misleading impressions, particularly regarding product bundling. This ruling strengthens protections against manipulative tactics, such as dark patterns, in both traditional and digital markets.