Fostering Consumer Protection in the Granular Market. The Role of Rules on Consent, Misrepresentation and Fraud in Regulating Personalized Practices

Abstract

Online commerce experienced a technological revolution, shifting towards automated, data-driven technologies for the allocation and display of offers and advertisings. The introduction of tracking and targeting technologies that leverage consumer data to personalize marketing catalysed the impressive growth of the online markets. Tailored and targeted commercial techniques constitute a heterogeneous phenomenon, incorporating ex multis semantics and data mining stemming from artificial intelligence, auction, social network and neuroscience analyses; they rely on self-tuning algorithms, intent data and immersive multimedia to reach different degrees of personalization. These innovations provide companies with new modes to gain market advantage (e.g. the use of ICT, IoT technologies and Big Data) and to offer their products (reverse segmentation, narrowcasting and use of the semantic Web): they have the possibility to widely study consumers and to personalize every aspect of their consumption experience. Consumers exposed to such potential situations could end up not being able to recognize the artificial reduction of their set of choices, and eventually, to oppose to it, being unaware of the way through which product offers and advertisements utilize their habits, mental models and bias to influence their behaviours. The result of these and related trends is that firms can not only take advantage of a general understanding of cognitive limitations but also can uncover, and even trigger, consumer frailty at an individual level. In order to fully overcome the problem of a possible structural inadequacy of consumer law due to its hardship to deal with the evolution occurred in the digital environment and – at the same time – to exploit the opportunities that these developments offer in order to reach a better framework for consumers, is essential to investigate possible re-interpretation of existing regulation. With regards to this aspect it has been underlined, in particular, that some notions and tools operating in private law can be “porous” enough to permit an orientated interpretation to regulate personalized commercial practices. In order to properly explore such possibility, the article examines the role and characteristics of some private law institutes regulating consent and misrepresentation in order to evaluate if these corpora present a sufficient margin of appreciation to incorporate emerging findings on personalized practices, making them viable instruments for a modernization of consumer protection.