About Algorithms and Beyond – project update

The About Algorithms and Beyond programme involves four projects, including ‘The Role of Consumer Law in the Governance of Targeted Advertising Algorithms, led by Richard Hyde (@richardmhyde)

Background

Consumer law was written with traditional forms of advertising in mind. It is not well adopted to situations where algorithms are used to individually target consumers, and therefore much of the work in regulating targeted advertising is done by data protection and privacy law. However, consumer law (such as the Unfair commercial Practices Directive and the Unfair Terms Directive) can and should play an important role in the governance of targeted advertising. This project builds on work that examines online targeted advertising by considering, first, the ways that data from beyond browsers may be used by algorithms to target advertising and, second, the challenges and opportunities for governance of such algorithms and their advertising outputs by consumer law and beyond.

Project update – December 2017

Over a productive four month period the Consumer Law Team have developed a theoretical framework to explain the infringement of consumer rights that can result from commercial practices that utilise algorithms.

By utilising the framework provided by the United Nations Guidelines for Consumer Protection, the team have identified the right to free choice, the right to information and the right to privacy as the consumer rights that are engaged by algorithmic commercial practices.

In order to assess whether algorithmic commercial practices posed a risk to consumer rights we carried out a literature review, examining offline commercial practices, online commercial practices and algorithmic commercial practices, assessing whether these practices were low or high infringements of the three rights. We then placed the different practices within an octant diagram, with the practices most in need of regulation in the octant representing high infringement of each of the three rights. We discovered two practices in this octant, subliminal advertising, and emotional targeted advertising.

Subliminal advertising is already banned in most jurisdictions. Therefore, our project focuses on the regulation of emotional targeted advertising, assessing the current regulatory environment, in particular examining the GDPR, the ePrivacy Directive and the Unfair Commercial Practice Directive.  

The project concludes that this regulatory framework does not go far enough in regulating this area, particularly with regard to emotionally vulnerable consumers. We will therefore propose regulatory changes to ensure that consumer’s rights are not infringed by emotional targeted advertising.”