Rise of AI-based Algorithms has a big impact on consumer decisions
By Mahima Garg
The term ‘consumer' has not been given an exhaustive legal definition in international law, but the US President, John F. Kennedy's statement that “consumers, by definition, include us all”, while introducing a draft Bill on consumer rights on March 15, 1962 (now celebrated as World Consumer Rights Day), is the source of the concept of consumer rights.
Therefore, consumer rights ought to be viewed as a distinct subset of human rights. It is interesting that although one may choose not to utilise these rights, one cannot give them up.
Consumers play a significant role in the market economy, which provides enough justification to offer legal protection to everyone who, under certain conditions, becomes a customer while interacting with professionals in the market.
The right to safety, the right to information, the right to make choices, the right to satisfaction of basic needs, the right to be heard, the right to redress, the right to consumer education and the right to a healthy environment, broadly, determine the status of a consumer in the modern era.
For the foreseeable future, as technology and national policies evolve, the standing of consumer rights will undoubtedly be strengthened by adding more rights to the list.
Globally, consumer protection is a major concern in e-commerce which is a system that facilitates sales of goods and services through electronic exchange. Through cost savings, increased competition and improved production process organisation, e-commerce broadens choice and boosts productivity.
Consumer International (CI), which was founded in 1960, is an alliance of about 250 consumer organisations from more than 100 nations that advocates and defends consumer rights in fora for international policy and the global economy.
In 2017, the United Nations Conference on Trade and Development (UNCTAD) examined consumer education, fair business practices and international cooperation to foster consumer trust, relevant laws and their enforcement.
The vast expansion of electronic commerce across the globe, particularly in India, has led to a review of the legal framework governing online consumer protection.
The majority of UNCTAD members, including India, have passed a variety of laws pertaining to e-governance, e-business and e-society. These laws include those governing e-transactions, consumer protection, cybercrime, and data privacy and protection.
The trend suggests that building trust in online transactions depends heavily on the law of the nation. Compared to offline purchases, online shopping requires more trust. In e-commerce, trust is essentially the capacity of one party to be open to the actions of another; trustors, by virtue of their networking connections, view trust as taking risks.
The goal of the Consumer Protection (E-Commerce) Rules, 2020, which were published on July 23, 2020 under the Consumer Protection Act, 2019, is to safeguard consumers' rights and interests in e-commerce by stopping unfair trade practices. The 2019 Act aims to change the jurisprudence underlying consumer protectionism from caveat emptor to caveat seller in order to protect consumers' rights in all contemporary retail commerce models.
Furthermore, the Act officially included business-to-consumer (B2C) e-commerce, simplified the complaint filing process and allowed customers to file complaints online and get their grievances resolved. Undoubtedly, the grievance redress mechanism outlined in the 2020 Regulations attempted to cater to the growing reliance on e-commerce during the pandemic.
Similar to numerous novel and developing technologies, Artificial Intelligence (AI) remains somewhat enigmatic. Artificial intelligence (AI) has many implications for consumers and consumer organisations that work to protect them, ranging from internet-connected voice assistants that assist us with our shopping lists to hidden algorithms that decide how much to charge us for our hotel room by analysing user browsing history, past purchases and preferences.
For instance, finding things that fit, one of the most annoying aspects of online shopping for clothing, is made easy by using systems that combine computer vision, machine learning and 3D scanning. These systems measure a customer's dimensions in real time by having them stand in front of a camera. The best fit is found by comparing those measurements to a database of clothes, increasing customer satisfaction and lowering return costs.
Moreover, cashier-less stores and other checkout systems driven by AI are also emerging. These systems streamline the checkout process and reduce wait times by automatically detecting and charging customers for the items they select using computer vision and sensor technologies.AI provides personalised product recommendations that are in line with each user's interests and preferences, improving shopping experiences and fostering customer loyalty.
However, use of AI raises a number of difficult problems for global consumer protection, including intrusive AI that compromises our privacy, human bias and discrimination that is reflected in technology, and a lack of transparency regarding the algorithms used to shape the services and prices we receive online. For example, when it comes to driverless cars, AI can even pose a deadly risk to public safety.
Personalised recommendations from AI have a big impact on consumer decisions. The private sector has made use of research on human decision-making biases to increase the likelihood that customers will make purchases. In order to develop solutions to the issues raised by AI, cooperation between consumer organisations, civil society, businesses and policymakers will be essential with specific consumer legislations pertaining to AI and technological advancements.
(IPA Service)
