March 15th marks World Consumer Rights Day, an annual event that commemorates the pivotal speech delivered by former US President John F. Kennedy in 1962. Kennedy’s address to Congress shed light on the significant role consumers play in the economy, acknowledging them as “the largest economic group, affecting and affected by almost every public and private economic decision.”
World Consumer Rights Day embrace AI’s influence on consumer behavior
This year’s theme, “Fair and Responsible AI for Consumers,” highlights the growing impact of artificial intelligence (AI) on consumer behavior and purchase decisions. AI technologies are redefining how businesses engage with consumers, offering personalized services and tailored offers through data analysis and pattern recognition.
While AI offers numerous advantages, such as anticipating customer needs with greater precision, it also raises concerns regarding privacy and potentially unfair commercial practices. Consumers have the right to be informed whenever an algorithm uses their personal data to generate product or service offers.
The EU’s New Deal for Consumers
The European Union’s Consumer Rights Directive, revised through the New Deal for Consumers, addresses these concerns by mandating traders to disclose when prices have been personalized based on automated decision-making processes and consumer behavior profiling. This transparency ensures that consumers are aware of potential price adjustments tailored specifically for them.
Transparency requirements extend to online search engines, which must disclose the criteria used in ranking search results, such as price, distance, consumer ratings, or a combination of factors. This measure aims to prevent consumer misinformation and potential bias or discrimination resulting from automated processes.
Human assistance in AI-driven customer service
AI has revolutionized communication between traders and consumers, with live chat interfaces becoming the preferred method for real-time customer service. However, when chatbots fail to meet customer expectations, consumers should have the option to request human assistance. Traders should transparently disclose when customers are interacting with a robot to maintain trust and satisfaction.
The integration of AI into products and services introduces concerns regarding consumer safety and liability allocation. The European Commission is 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 General Product Safety Regulations, set to come into force in December 2024, are specifically designed to mitigate safety risks associated with new technologies and the growth of online commerce. These regulations introduce detailed procedures for product recalls, ensuring consumer protection against dangerous products and the right to effective, cost-free, and timely remedies.
Addressing the challenges posed by AI requires proactive measures, including robust data protection regulations, algorithmic transparency, and frequent updates to the legal framework to keep pace with the rapid evolution of technology.
As AI continues to reshape the consumer landscape, striking a balance between fostering innovation and safeguarding consumer rights becomes paramount. Transparent communication, clear accountability frameworks, and robust legal protections are essential to ensure that consumers can reap the benefits of AI while mitigating potential risks and maintaining trust in the digital marketplace.