March 15 is the day when the world celebrates consumer rights. On this date in 1962, American President John F. Kennedy delivered a speech to the US Congress regarding consumer rights, making him the first world leader to acknowledge the significant role of consumers in the economy. In his declaration, Kennedy stated that “consumers are the largest economic group, affecting and affected by almost every public and private economic decision”.
To commemorate this occasion, every year on March 15, efforts are made to raise awareness about consumer rights. This annual event serves as a platform for discussing contemporary issues and exploring ways to empower and protect consumers more effectively. In addition, Consumers International, which is the membership organisation for consumer groups around the world, selects a theme each year to mark this day. This year’s theme is ‘Fair and responsible AI for consumers’.
The growing influence of artificial intelligence (AI) in our everyday lives is undeniable. AI is increasingly reshaping consumers’ behaviour and purchase decisions. This new technology is also redefining the ways in which businesses engage with consumers.
Consumers can reap numerous advantages from AI. For instance, AI technologies can help them in finding tailored offers that cater to their requirements, resulting in more personalised services. From a business perspective, AI’s capacity to analyse extensive data sets and recognise distinct patterns has enabled them to anticipate customer needs with greater precision. Nonetheless, certain risks emerge, including privacy concerns and potentially unfair commercial practices.
Traders should transparently disclose when customers are interacting with a robot
Consumers need to be protected through enhanced transparency on how their personal data is used. Consumers have the right to be informed whenever an algorithm uses their personal information to generate offers for products and services.
This requirement is already incorporated in the EU Consumer Rights Directive, as revised by the New Deal for Consumers. Under this directive, traders are required to notify consumers when the price has been personalised based on automated decision-making processes and profiling of consumer behaviour. This disclosure ensures that consumers are aware of the possibility that the listed price may have been adjusted specifically for them.
Transparency requirements also extend to online search engines due to the automated processes that can potentially yield biased or discriminatory results. To prevent consumer misinformation, the Consumer Rights Directive mandates online search engines to disclose the criteria used in determining the ranking of search results, such as whether the results are based on price, distance, consumer ratings or a combination of different criteria.
AI has also revolutionised communication between traders and consumers, with live chat interfaces emerging as the favoured method for real-time customer service. However, these interfaces often fall short of meeting customer expectations, causing disappointment when chatbots are the sole point of contact with traders.
Thus, it is crucial for consumers to always have the option to request human assistance if they are unsatisfied with the outcome of AI-driven complaint-handling. Additionally, traders should transparently disclose when customers are interacting with a robot.
Other risks associated with AI pertain to consumer safety. The incorporation of AI into products and services introduces various concerns, including the allocation of responsibility if autonomous systems cause harm and the liability of businesses under such circumstances.
To address these concerns, the European Commission is currently working on measures to ensure that victims of damage caused by AI applications have the same level of protection as victims of damage caused by other products or services. The revised rules on product safety, specifically the General Product Safety Regulations, which will come into force in December 2024, are specifically tailored to mitigate safety risks associated with new technologies and the growth of online commerce.
These new regulations also introduce detailed procedures for product recalls, ensuring consumer protection against dangerous products and right to effective cost-free and timely remedy for consumers.
In conclusion, while AI provides notable advantages to consumers, such as personalised experiences and improved customer service, it also brings about concerns regarding privacy, automated decision-making processes, product safety, and unclear responsibility in case of defective goods. Addressing these challenges requires proactive measures, including robust data protection regulations, algorithmic transparency, and frequent updates of the legal framework given the quick evolving of technology.
Odette Vella is director, Information and Research Directorate, MCCAA.