5. Market Ethics: Quality, Fairness, and Avoiding Deception
A market begins with a simple asymmetry: the seller usually knows more about what is being offered than the buyer does. The manufacturer has seen the raw materials and the production process; the repair technician knows about hidden defects in the device; the service provider knows the real limitations of the service; but the customer largely depends on the information supplied by that same provider. A major part of market ethics concerns how this knowledge gap is used.
In his classic article “The Market for ‘Lemons,’” George Akerlof showed that when buyers cannot distinguish good quality from bad before a transaction, distrust harms more than fraudulent sellers. Buyers lower the price they are willing to offer on the basis of lower average quality; as a result, sellers of high-quality goods have less incentive to remain in the market. The model does not produce the same conclusion for every market or circumstance, but it highlights an important mechanism: when quality remains hidden, even honest suppliers can gradually be harmed.1
This is why honesty in presenting a product is more than a personal virtue. Clear information, credible warranties, accessible complaint mechanisms, and accountability for defects help customers distinguish responsible suppliers from irresponsible ones. In a market where such signals are weak, suspicion falls on all sellers—even those who genuinely offer better quality.
Customers Have a Right to Know What They Are Buying
Under Iranian law, a supplier’s responsibility is not limited to physically delivering goods. Article 2 of the Law on the Protection of Consumer Rights holds suppliers responsible for the soundness and conformity of goods and services in accordance with law, contract, or the customary terms of the transaction. Article 3 of the same law also requires them to provide consumers with information such as type, quality, quantity, pre-use information, and production and expiration dates.2
This legal duty is a formal expression of the same ethical principle discussed in earlier sections as stewardship. A customer cannot make a decision about a risk whose existence has been concealed. Apparent consent has ethical value only when information that could materially affect the choice has not been withheld.
Yet providing information should not become an avalanche of technical terms, fine print, or explanations that satisfy a disclosure obligation only in appearance. All the details may be written somewhere, while the presentation is so complex that the audience cannot realistically understand the final price, the limitations of the service, or the warranty conditions. Transparency is more than the “existence of information”; the information must be presented in a form that can actually be used in the buyer’s decision.
In electronic transactions, the law states this more explicitly. Article 33 of the Electronic Commerce Act requires the supplier, before the contract is concluded, to provide information relevant to the consumer’s decision, including technical and functional specifications, the seller’s identity and means of contact, all purchase costs, the period for which the offer is valid, and terms governing payment, delivery, termination, and after-sales service. Article 35 further requires that this information be provided clearly, explicitly, and on a durable medium.3
Law sets the minimum obligation, but professional ethics goes one step further. An ethical seller does not ask only, “Has the information been recorded somewhere?” The seller also asks, “Can the customer, on seeing this information, actually understand what they are buying and what obligation they are accepting?”
A Hidden Defect Is Not Just a Problem with One Product
When a defective product, or one that does not match the stated terms, is supplied, the buyer suffers first; but the consequences do not stop there. A failed experience can reduce a customer’s trust in a shop, a brand, and even an entire trade. If such experiences are repeated, people must spend more time comparing options, asking questions, and searching for signals of credibility even for simple purchases.
The Law on the Protection of Consumer Rights also draws a direct connection between defects and supplier responsibility. Article 2 provides rights in relation to defective or non-conforming goods—such as demanding a sound replacement, rescission, or an adjustment for the defect, depending on the subject matter of the transaction. Articles 16, 18, and 19 also address compensation and enforcement in the circumstances they specify. The precise consumer right and competent authority in any case depend on the circumstances of the transaction and the relevant rules; a single provision should not be used to reach the same conclusion in every dispute.2
Ethically, not all defects are the same either. A defect may arise despite reasonable care and without prior knowledge. In such a situation, professional conduct is measured by acknowledging the problem, informing the customer, and providing an appropriate remedy. Another situation is different: the supplier knows of a defect or reduction in quality and conceals it. The issue is then no longer merely technical weakness; the customer’s ignorance has been deliberately built into the profit model.
Clear Pricing Is a Condition of Fair Dealing
A fair price does not necessarily mean a low price. A good or service may be expensive, but if its features, costs, and terms are transparent and the customer chooses freely, expense alone does not make the transaction unethical. Conversely, an apparently low price may conceal fees, require the purchase of ancillary services, or include conditions that move the transaction away from fairness.
Article 5 of the Law on the Protection of Consumer Rights requires suppliers to state the unit price of a good or the fee for a service clearly, in writing, and visibly. Note 1 to Article 3 also prohibits making the sale of one good or service conditional on the compulsory purchase of another.2
In electronic commerce, price transparency is not limited to the figure shown beside the product image. Under Article 33 of the Electronic Commerce Act, all costs borne by the customer—from the price of the good or service to taxes, shipping, and communication costs—must be disclosed before the contract is concluded.3
A fee disclosed only at the last stage of payment may place the customer, psychologically, in a position where it is harder to withdraw after investing time and moving through the purchase process. Even where such a method might be defensible in formal terms, hiding the real price until the final moment is inconsistent with the spirit of clear and fair dealing.
Deception Is Not Always a Direct Lie
Many misleading advertisements contain no sentence that can simply be labeled a “lie.” Sometimes a minor truth is emphasized while the main limitation is concealed. An image is selected that makes an unusual outcome look typical. A price is advertised that is available only under very narrow conditions. Or an ambiguous phrase is written so that the audience forms a stronger impression than the facts support.
Article 7 of the Law on the Protection of Consumer Rights prohibits false advertising and the provision of incorrect information that deceives or misleads consumers. Article 50 of the Electronic Commerce Act likewise bars suppliers from any act or omission that misleads or deceives the audience about the quantity or quality of goods and services.[2][3]
The phrase “act or omission” in Article 50 is important. Deception does not occur only through making a false statement; deliberately withholding a fact that is decisive to understanding a product’s quantity or quality can also matter in the legal assessment of an advertisement. Whether particular conduct legally constitutes deception depends on the content of the advertisement, the context in which it is presented, and the view of the competent authority. Ethically, however, the supplier’s responsibility is clearer: if the supplier knows that the absence of certain information will materially alter the customer’s understanding, silence is not neutral.
Article 52 of the Electronic Commerce Act requires advertising to be presented in a way that enables consumers to understand information about goods and services accurately, correctly, and clearly. Articles 53 and 54 also emphasize making visible the identity of the person or business for whose benefit the advertisement is made and prohibit concealing identity or place of business in an electronic environment.3
These provisions have special significance today. On social media, the line between personal experience, educational content, and paid advertising can become blurred. If an audience does not know that a recommendation is connected with financial benefit, receipt of a gift, or a commercial relationship, it cannot properly assess the weight of that recommendation. The ethical principle is simple: advertising should not pass itself off as independent judgment or impartial experience.
Consent Is Not Silence
In a fair transaction, consent should result from choice, not from fatigue, ambiguity, or an assumption based on the customer’s silence. Article 43 of the Electronic Commerce Act expressly provides that a supplier may not treat a consumer’s silence as consent. Article 46 likewise renders ineffective contractual terms contrary to the protective rules of that chapter and unfair terms that operate to the consumer’s detriment.3
For distance transactions, Article 37 also provides, subject to the statutory scope and exceptions, a minimum of seven working days for the consumer’s right of withdrawal. The commencement and exercise of this right are governed by subsequent provisions and exceptions relating to the type of good or service; it therefore cannot be generalized to all transactions without regard to the legal conditions.3
Market ethics does not seek to give customers a right to ignore any commitment whenever they choose. Its purpose is to prevent transactions in which one party uses complexity, haste, or the design of the purchase journey to weaken the other party’s real autonomy. Valid consent arises when a person knows what they are accepting, at what price, and on what terms.
People’s Urgent Need Is Not an Opportunity for Exploitation
The true face of fairness is not always visible under ordinary conditions. When a good is scarce, people are anxious, or a need is urgent, bargaining power becomes more uneven. In such circumstances, the opportunity for greater profit may be economically attractive, but not every pricing opportunity can be treated as ethically equivalent without regard to its source.
The Law on the Protection of Consumer Rights treats collusion or the imposition of conditions that reduce supply, lower quality, or raise prices as an offense. Article 1, in defining collusion, refers to agreements among suppliers to increase prices, reduce quality, restrict production or supply, or impose unfair conditions.2
This legal rule should not be understood to mean that every price increase or high profit is automatically a crime. Production costs, genuine scarcity, risk-taking, and supply conditions all affect price. Establishing a violation requires the statutory elements and review by the competent authority. The ethical question is both narrower and broader: has the supplier turned people’s need and lack of alternatives into an instrument of disproportionate pressure?
A market shaped by javanmardi does not eliminate profit; it distinguishes profit created through value from profit created by trapping another party.
The Digital Market: Old Responsibilities in New Form
Online shops, platforms, social-media pages, and messaging services have changed the form of the marketplace without eliminating its core responsibilities. The party that knows more and has more tools for shaping the audience’s decision also bears greater responsibility for transparency.
In an in-person transaction, a customer can see the product or ask questions about it. In a distance transaction, images, descriptions, ratings, user reviews, and page architecture replace part of that direct observation. If these elements are manipulated, provide incomplete information, or present advertising as genuine experience, the knowledge gap between seller and buyer grows.
The Electronic Commerce Act does more than regulate the display of goods. Articles 33 through 35 govern pre-contract information and how it must be provided; Articles 37 through 40 address the right of withdrawal, refunds, and the supplier’s inability to perform; and Articles 50 through 56 set rules for electronic advertising.3
These rules are legal minimums, not the ceiling of market ethics. A practice may not yet be the subject of an explicit rule or settled interpretation and still be deliberately designed to divert a customer’s choice. Button design, making cancellation difficult, highlighting the more expensive option, or obscuring automatic renewal are examples that should be evaluated not only by asking, “Is this prohibited?” but also, “Does this preserve the customer’s informed autonomy?”
Trust Is Rebuilt Through Redress
No manufacturer or seller is immune from error. The difference between a healthy and unhealthy market is not visible only in the number of errors; the response to error also matters. A supplier that hides the complaint process, passes responsibility from one department to another, or exhausts the customer through repeated follow-up turns the initial harm into lasting distrust.
The implementing regulations of the Law on the Protection of Consumer Rights require manufacturers, importers, sellers, and after-sales service intermediaries to establish mechanisms for responding to and handling consumer objections. Article 42 of those regulations also places primary responsibility for receiving objections, vindicating consumers’ rights, and securing consumer satisfaction on the supplier.4
“Securing satisfaction” here should not be reduced to silencing a complaint or offering a temporary promise. Real accountability means that the problem is recorded, its cause is investigated, the harm is remedied within the scope of responsibility, and the likelihood of recurrence is reduced. A customer complaint is not only a threat to a firm’s reputation; it can reveal where the production, sales, or support process has failed.
Ultimately, market ethics defends a simple principle: the customer is not prey. The customer is a party to an economic relationship and has a right to know the subject of the transaction, its price, quality, limitations, and the supplier’s identity. The seller, too, has a right to profit, transactional security, and fair treatment. A healthy market emerges when neither party treats the other’s ignorance or desperation as a hidden asset.
In the futuwwa tradition, the person who knew more was expected to be more trustworthy. The same principle remains in today’s market even though the tools and laws have changed: the greater a firm’s power to shape a customer’s perceptions and choices, the heavier its responsibility for honesty, clarity, and remedying mistakes.
The next section takes this discussion into an economy in which the object of a transaction is not always a tangible good or service. Sometimes the primary value lies in an idea, experience, data, a design, or a solution that took years to develop.