Fostering Consumer Protection in the Granular Market:

the Role of Rules on Consent, Misrepresentation and Fraud in Regulating Personalized Practices

Abstract

In the e-Commerce, companies increasingly employ data-driven technologies for the allocation and display of offers and advertising. Tailored and targeted commercial strategies incorporate data mining from artificial intelligence, self-tuning algorithms, social network and neuroscience analyses to achieve different degrees of personalization. These innovations provide companies with new ways to gain market advantage, as it is possible to study consumers broadly and personalize every aspect of the consumption experience.

Consumers exposed to such practices could fail to recognize the manipulation of their set of choices, as they may be unaware of the way in which product offers and advertisements use their habits, mental models, and biases to influence their behaviours. The result of these and related trends is not only that firms may take advantage of consumers’ lack of understanding due to cognitive limitations, but also that consumer frailty at an individual level could be revealed and triggered.

Against this backdrop, private law rules could provide meaningful normative guidance in regulating personalized commercial practices.

The article examines the role and characteristics of provisions regulating defective consent and misrepresentation to evaluate whether these rules could incorporate emerging findings on personalized practices and operate as viable instruments for the modernization of consumer protection.