The Hidden Harms of Targeted Advertising by Algorithms and Interventions from the Consumer Protection Toolkit

Abstract

Developments in pervasive data collection and predictive data analytics are allowing firms to target consumers with increasingly precise personalised, behavioural and contextual advertising. These techniques give rise to new risks of harm in the attention economy by unduly influencing or manipulating consumers’ decision-making, and also by narrowing the product options visible and available to them. In many countries, the legal response to concerns about targeted advertising by algorithm has been focused on privacy protection and data rights. These are important initiatives. However, consent-based data rights are unlikely to provide a comprehensive or even adequate response to the risks of harm to consumers occasioned by the kinds of algorithmically targeted advertising that are now possible. This paper suggests that a suite of responses from the consumer protection toolkit are required to respond to the different manifestations of algorithmically targeted advertising. These include bans and warnings as well as making use of standard safety-net prohibitions on misleading and unconscionable/unfair conduct already in place in many jurisdictions.

Keywords: Consumer Protection; Targeted Advertising; Data Analytics; Consumer Manipulation