A combination of two related question from @simonr916
a).Without regulation, what is to stop companies from acting
in amoral or immoral ways to the detriment of all
b).Without regulation and controls, how can we avoid being
deceived and make meaningful choices?
A libertarian world would permit snake-oil salesmen to tour from town to town, making fantastical claims to the poorly educated citizenry (no state education remember) but would also allow big companies to say what they liked.
So tobacco companies could still be telling us that smoking cures asthma, and we’d have no way of knowing how much fat, salt and sugar there is in a happy meal.
Perhaps the first thing to point out is that even with state regulation and controls we are not protected from deception. Homeopathy practitioners, Tarot card readers, psychic healers and all manner of nonsense peddlers continue to operate in our state regulated society. Exploiting the wise state educated citizenry on a daily basis.
Tobacco companies carried out their historic deceptions in a statist society not a libertarian one and we have recently had the joys of horse meat in our “beef” despite the state funded Food Standards Agency regulating this industry.
You cannot prevent people from saying things that are untrue, unless you are an omniscient dictator.
What matters is how you deal with people who knowingly deceive.
Lets compare the statist and libertarian response to a hypothetical example of a company selling a pleasant tasting drink, Brand X. The company knows it causes cancer, but it is very addictive, causing customers to buy 20 to 40 cans a day and once they start they will be brand X drinkers for life. It is highly profitable product and all the executives are on six figure profit related bonus schemes.
In the regulated statist world
People start to get cancer.
People start to make connections and start to suspect that the problem is with Brand X. They call the authorities who have limited fixed budgets and decide that it is not cost effective to investigate this now, they have other priorities.
More people start to get cancer and more people call the authorities.
Eventually they decide the matter must be investigated and schedule some research.
The research is state funded, budgets are tight and it may take many years to be started. Finally the evidence is in and the case is overwhelming that Brand X is to blame.
Unfortunately the state is earning large amounts of tax income from the sales of Brand X and has a conflict of interest in banning the product.
The chairman of the company is also a big donor to the political party in power and entertains many politicians on his luxury yacht in the Bahamas each year.
A compromise is reached and they negotiate some laws that mean the packages of Brand X have to carry a warning and fine the company several hundred million pounds for deception.
The company pays the fine by missing a dividend to the shareholders.
The executives get to keep the six figure bonuses they made in each of the ten years before the problems were identified and action taken.
Other company executives see this and decide that the punishment for deception is nothing compared to the bonuses they can earn from the extra profit.
They launch brand Y the following week and Brand Z the week after. Incidences of unexplained cancer continue to rise.
In the libertarian world
People start to get cancer.
People start to make connections and start to suspect that the problem is with Brand X. They call a private law firm.
Seeing the opportunity for a profit from a contingency fee arrangement, the private law firm hires a private research firm immediately to do some preliminary research.
The results look damaging so they pay to have a full study done immediately.
The evidence is overwhelming against brand X and the law firm takes action.
Since there are no limited liability corporations in a libertarian society the individual executives and investors are held personally accountable.
Libertarian justice operates on the principle of restitution for the victims. Those managers or investors the court is satisfied knew brand x caused cancer are guilty of murder. Libertarian punishment is set by the victims or their heirs and for murder the maximum punishment is the death penalty.
The injured parties signed an agreement with the law firm allowing many of the more junior guilty parties to buy themselves out of their punishment by selling all their possessions including their homes, with the money being paid in compensation to the victims and their families after covering the legal and research costs.
The managing director and senior executive team are executed at the request of the victims. The share price plummets costing individual investors most of their life savings.
Other executives see this and decide that deception is very risky.
Investors see increased risks in the food and drink industry and refuse to get involved with any company unless they hire an independent research firm to confirm the safety of all products before launch.
Junior managers and employees refuse to work for food companies that don’t allow staff association appointed researchers to check product safety before launch.
In the coming months Brand P, Brand Q and Brand R are retired and withdrawn from the market. Incidences of unexplained cancer fall steadily.
To be clear there is no system that will ensure nobody is ever deceived.
You cannot regulate and investigate everything so you need consumer or academic suspicions to uncover potential malpractice.
Private, profit motivated law firms and research companies are structurally more responsive then fixed budget bureaucracies.
There are no conflicts of interest between a victim and the criminal who has harmed them, these are possible between criminal and state.
State regulation and limited liability protection creates moral hazard for Executives, employees and investors. Libertarian restitutional justice and personal liability removes this.