As digital and artificial intelligence technology develop fast, consumers might need more protection, both through the law and through information dissemination and education, writes Mahima Garg.
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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.
Consumer rights ought to be viewed as a distinct subset of human rights.
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.
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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.
AI and the consumer
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.
Also read: Hey Siri, make space for the She Techs!
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.
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.
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.
Psychological aspects
Instead of appealing to rational faculties, these strategies exploit psychological weaknesses to influence consumer behaviour. One could argue that this raises concerns about the freedom of thought.
According to Sean Parker, the first president of Facebook, a social network is all about “exploiting a vulnerability in human psychology” to take up as much of people’s time and conscious attention as possible.
Also read: Art, artificial intelligence and the law
Concerns about potential violations of users’ freedom of thought are raised by the power imbalance that arises from the behavioural science knowledge of designers, whether they are building social networks or casinos and the users of these products.
Today, there is a special concern regarding the illegitimate influence of marketing, which frequently aims to circumvent rational self-control. According to psychologist John Bargh, the consumer remains as unaware of these marketing influences and unjustifiably confident of his control, despite the fact that methods to go past his defences against influence are becoming ever more dominant.
In spite of this, the goal of marketing regulation is to stop false or misleading advertising. According to the right to freedom of thought, attempts to subvert reasoned self-control should concern regulators as well.
AI provides personalised product recommendations that are in line with each user’s interests and preferences, improving shopping experiences and fostering customer loyalty.
This highlights the importance of educating the general public about persuasion mechanisms. This might entail making it mandatory for advertisements to disclose the behavioural science insights that they are utilising to encourage consumers to use the rule of reason to make rational responses.
Here, to paraphrase Supreme Court Justice Louis Brande, the best disinfectant might be letting sunlight fall on the murky processes of manipulation. However, it does not automatically make social networking sites less appealing as knowing that nicotine is used in cigarettes to make them addictive does not make a smoker less likely to crave them.
Achieving scale
The largest obstacle, though, is usually getting from concept to scale for most organisations. This challenge can be especially tough for consumer-related businesses, as many of them have sizable legacy platforms for data and analytics, decentralised operations for data and analytics and decentralised authority and responsibility either within business units or, more often, among independently run franchises.
There are many reasons why AI adoption and maturity levels differ, such as organisational structures, talent scarcity, lack of trust and scalability due to complex and high-quality data.
Also read: India’s quest for a workable AI legislation
By collaborating, we can make sure that developing technologies are created with consumer security, privacy and safety in mind where innovative and cost-effective digital goods and services are offered to all.
Therefore, consumer organisations can rise to the challenge of AI, but only if they are prepared to adapt along with reasonable amendments in consumer laws.
The global consumer movement is in a unique position to act as the ‘enzyme that rebalances the digital ecosystem’ in a world where top tech companies always stay one step ahead of the competition.
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.
Collective intelligence, which entails knowledge exchange and cross-sector cooperation between consumer organisations, corporations, governments and civil society, can overcome the challenges posed by artificial intelligence.
Artificial intelligence-enabled digital contact centres, such as those that employ machine learning and natural language processing, can be more intelligent and predictive, and greatly enhance customer satisfaction while lowering the need for human intervention.
Even though electronic transactions and e-commerce have become widespread, it is interesting to note that Indian consumers are still hesitant to put all of their faith and confidence in business transactions conducted online. There is still a lack of confidence in AI and what it can and should be permitted to accomplish in many organisations.
Online, consumers negotiate with unidentified suppliers and vendors, which puts them at higher risk in cyberspace than traditional offline customers. The jurisdiction of filing complaints, inconceivable terms and conditions, product quality, uncertain delivery, no or low scope of replacement, and data privacy and security are common issues associated with e-commerce.
Online, consumers negotiate with unidentified suppliers and vendors, which puts them at higher risk in cyberspace than traditional offline customers.
A product’s ‘country of origin’ is a major problem in e-commerce, especially for cross-border transactions.
It is unclear how we will address these problems, but by mutual agreement, a variety of strategies, such as increased corporate accountability, stricter enforcement and greater transparency, would be required.
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.
