No Consumer is an Island - Relational Disclosure as a Regulatory Strategy to Advance Consumers Protection Against Microtargeting

Abstract

Nowadays, it is vastly acknowledged that the majority of business-to-consumer (B2C) interaction is based on consumer profiling, and that individuals’ data is increasingly used as a tool to elaborate and deliver personalized products and services.

Risks related to unregulated abuse of personalized commercial practices are present and significant: using personalizing technologies to match individual users to target audiences and even to create predictive profiles might result inter alia in violation of users’ data protection and privacy, unjust discrimination based on the analysis of protected factors, and manipulation of consumers’ decision-making in detriment of their competitors. It is no surprise, therefore, that in recent times profiling and micro-targeting came at the centre of the scholarly and regulatory debate.

In the European framework, the capability of the General Data Protection Regulation (GDPR) to provide effective regulation of the data management and processing methods implemented in profiling algorithms has been thoroughly inspected; also, competition law was identified as a tool potentially able to tackle the structural distortions caused by personalized practices occurring at market level. Personalized practices are taken into major consideration also in currently in-development regulatory projects, such as the Proposal for a Regulation on Artificial Intelligence. Lastly, a substantive body of literature focused on the role that consumer and private law can play in empowering individuals against these phenomena. Within such a heterogeneous framework, a common perspective across the different viewpoints seems nevertheless to be found: given the capacity of microtargeting to potentially undermine users’ autonomy, the success of the regulatory intervention depends primarily on people being aware of the personality dimension being targeted and on the modes of disclosure.

Yet, all the attempts to rethink disclosure across regulations are still based on the individualized-format of the model, focusing on the sole relationship between the professional operator and its counterparty, that characterizes existing rules. A consideration of a “relational dimension” of decision-making is largely absent in the current framework for consumer protection, and is missing in the debate on regulating personalization as well.

In light of these aspects, the article defends that consumers’ awareness and understanding of personalization and its consequences could be improved significantly if information were to be offered according to a relational format. The article reports the result of a study conducted in the streaming service market, in which we show that when information is presented in a relational format, people’s knowledge and awareness about profiling and microtargeting is significantly increased, and consumers understand with better clarity what these techniques are, how they function, and are consequently more open to evaluating if they want their information to be acquired.

Keywords: Consumer Protection, European Private Law, Personalization, Profiling, Granular Law, Disclosure

JEL Classification: K10, K39