zlacker

Consider the perfect information case. Let's say you're at a dealer to buy a car. Is the dealer obliged to tell you that the car you want to buy is available cheaper across the street? Are you obliged to tell the dealer that he's offering the car for way less than the dealer across the street?

Those would be perfect information. I don't see how this could be a reasonable requirement, and it certainly is not necessary for the free market to function.

Consider the dealer selling you a car that disintegrates a week later. I'm not a lawyer, but there's a doctrine of reasonableness and fit for purpose going on here, and you're entitled to recompense if the dealer did not disclose this to you - i.e. it's fraud.

If a grocery store sold you milk poisoned with lead, and did not disclose it, that's fraud as well as assault.

Truth in labelling laws are merely a convenience for that, so instead of things being decided case by case in civil court, having a blanket standard on how food should be labeled, and sanctions when it is fraudulently labeled, is entirely reasonable and makes for efficient operation of the free market. It is not "perfect information", which is by its nature rather absurd, and I've never seen it listed as a requirement by any free market economists.