This briefing is brought forward by the attorneys at law of Zamfirescu Racoți Vasile & Partners.
The European Parliament has recently approved a resolution addressing several challenges arising from the rapid development of artificial intelligence (AI) and automated decision-making (ADM) technologies. The resolution references several major pieces of work carried out by the European Commission on AI and provides a list of existing EU instruments that are relevant to AI and ADM — which together present a potential roadmap of areas of reform.
Artificial intelligence (AI) is nowadays developing at a fast pace, interfering more and more in consumers’ lives and leaving its own mark on consumers’ markets by facilitating new types of products and services. Without undermining the benefits that AI brings to society, the European Parliament rises awareness of the potential risks regarding consumers’ manipulation or the discrimination and non-transparent decisions of targets.
As these technologies are able to both help and endanger many aspects of citizens’ interests/rights, it is of utmost importance to examine the current EU legal framework and to address significant issues necessary for the elaboration of effective legal regimes in the areas of data protection law, consumer protection and competition law. Given these circumstances, a risk-assessment scheme for AI and ADM must be analyzed for a correct approach of the new technologies.
The necessity of a new legal framework is taken into consideration by the European Union, seen as a safeguard against these and other potential risks. Among the highlighted issues there are:
Personalized Price Discrimination
Price discrimination among consumers may be generated by AI when providing suppliers with individualized prices to be applied for every consumer. If such advanced technology masters an approximation of the highest price that a specific consumer may be willing to pay and may thus subtly influence one’s behavior, certain discrimination is created in the consumer domain. Although such discrimination might be legitimate within certain markets (such as credit or insurance), in most cases, there is undoubted exploitation of consumers’ needs.
Discrimination in Ad Delivery
Discrimination in delivering ads when targeting specific categories of consumers is generated by AI if the selection only relies on assumptions regarding their previous choices or if they fulfill specific characteristics that prove that they may be a suitable match for a product or a service. Thus, such assumptions may be based on prejudice that may create unfair discrimination.
Targeted Advertising
Advertising that only addresses a certain area of consumers when AI delivers ads for goods or services that most likely meet one’s desires given the available stored data might exploit consumers’ vulnerabilities. In such a context, not only behavior patterns understood by AI technologies may be considered aggressive advertising, but also a possible limitation of information and even establishing a border that limits choices.
The European Parliament is now seeking to ensure a safe, transparent and just society by finding a balance between the inevitable digital transformation of our society and consumers’ rights.