Regulators are increasingly aware of the practical implication of such phenomena as algorithmic bias, price discrimination, blackbox AI as well as the misuse of the personal information of consumers. The dangers of algorithmic exploitation in the context of mass market consumer transactions is underexplored. The chapter describes how technology-driven exploitative commercial practices have passed under the legal and regulatory radar. It examines the extent recent regulatory addresses the impact of such practices.

This chapter examines diverse aspects of new technologies that are disrupting traditional consumer protection. These include phenomena such as consumer profiling or commercialization of data. It can be concluded that artificial intelligence represents a particular challenge for consumer law and policy. Consumer law should be technologically neutral. Irrespective of the technology deployed, the level of consumer protection needs to be always maintained. However, consumer law requirements must never be seen as obstacles to the innovation and the development of new technologies; and establishing the right balance between these two values remains a particular challenge.

This chapter argues that the influences on consumer choice should be revisited because the digital environment and the use of AI increase the urgency of having a clear criterion with which to distinguish permitted influences from prohibited ones. The current emphasis on either rational consumers or behaviourally influenced consumers operates with an ideal of unencumbered choice which has no place in reality and overlooks the fact that the law allows many subtle or not-so-subtle attempts to influence the actual behaviour of consumers. To effectively stand up to the force of AI-driven sales techniques, it may be necessary to update the existing framework of consumer protection.

This Chapter will examine whether the Digital Content Directive (DCD) can sufficiently protect the consumer who concludes contracts through software on AI-driven online platforms (without being directly involved in the contractual process) against certain of the existing risks. More specifically, due to a technical error or some other factor, such contracts may be mistaken or unintended by the human consumer. Moreover, the consumer may end up dealing with an unreliable, fraudulent or even fictitious trader suffering loss as a result. The question arises as to whether the consumer will have a sufficient remedy in these cases, namely an available route to compensation. In this respect, the Digital Content Directive merits examination with the aim of ascertaining whether it responds to this need of the consumers who contract on AI-driven platforms. The main questions in this context will be whether such platforms qualify as ‘digital services’ within the meaning of said Directive and if yes, whether the provisions of the measure are suitably adjusted to the need of the substituted consumer for an available route to compensation in these cases. These questions may also pinpoint to a possible approach towards the liability of marketplaces for the non-conformity of goods and services offered by third party sellers through their systems. As it will be shown, though the DCD does contain tools that could prove useful to consumers in their attempt to claim and receive compensation, its application is not without problems that may prevent this result. Other measures, specifically the Digital Services Act (DSA) and the Unfair Commercial Practices Directive (UCPD) may offer some help, where the DCD could not do much.