Artificial Intelligence and Consumer Protection

AI-based applications raise new, so far unresolved legal questions, and consumer law is no exception. The use of self-learning algorithms in Big Data analysis gives companies the opportunity to gain a detailed, individual insight into the customer's personal circumstances, behavior patterns and personality. On this basis, companies can tailor their advertising, but also their prices and contract terms, to the respective customer profile and – drawing on the findings of behavioral economics – exploit the consumer's biases and/or her willingness to pay. AI-based insights can also be used for scoring systems to decide whether a specific consumer can purchase a product or take up a service. The use of AI in consumer markets thus lead to a new form of power and information asymmetry.