Private Law Theory

ABSTRACT
This report is an interim output for the Guiding Principles and Model Rules on Algorithmic Contracts project, the focus of which is the use of automated decision-making (ADM) through algorithms, particularly Artificial Intelligence (AI) driven algorithms, for the conclusion and/or performance of contracts. We offer a review of existing key EU consumer law directives to determine whether, and to what extent, they could deal with the use of deep-learning AI or deterministic algorithms in automating elements of the contracting process. For the analysis, we assume an AI system, referred to throughout as a ‘digital assistant’, can be deployed by a consumer to take over one or more steps usually taken by a human consumer towards concluding or performing a contract. Such digital assistants could be provided as free-standing applications as well as integrated features of smart goods. The analysis proceeds in two steps: first, we set out the general principles that should guide the adaptation of existing EU consumer law to ADM; and secondly, we assess the implications for several EU consumer law directives (those of broad application, such as the Consumer Rights Directive, the Unfair Contract Terms Directive, or the Unfair Commercial Practices Directive). The report is limited to considering the ‘fitness’ of current EU consumer law for ADM. In essence, it analyses how the consumer law acquis would cope with the widespread use of ADM. In carrying out this assessment, the focus lies on how EU consumer law can continue to ensure adequate consumer protection in an economy where digital assistants become more prevalent (the protective function of EU consumer law), whilst enabling the use of innovative technologies in consumer markets (the enabling function). For present purposes, EU consumer law would be regarded as ‘ADM ready’ if it can adequately deal with the use of digital assistants by consumers; this does not mean that EU consumer law, even with the adjustments suggested here, would be the optimal legal framework. Phase 2 of the project will turn to this question.

Twigg-Flesner, Christian and Rodríguez de las Heras Ballell, Teresa and Busch, Christoph and Jull Sørensen, Marie and Szostek, Dariusz, EU Consumer Law and Automated Decision-Making: Is EU Consumer Law ready for ADM? (November 27, 2023).