Reed Smith Client Alerts

Will 2019 be the “year of agency and accountability” for those employing algorithms, machine learning and artificial intelligence (AI) in their day-to-day business? At least one panelist from the Federal Trade Commission’s (FTC) November 13–14 hearings on “Competition and Consumer Protection in the 21st Century” thinks so. The panelists, an assembly of industry leaders, academics and enforcers, discussed consumer protection and antitrust issues that arise from harvesting data through AI, the role of industry in mitigating potential harms and whether government agencies can effectively prevent AI misuse within existing legal frameworks.

Robot holding screen

AI and consumer protection

The first day of the hearings focused on consumer protection issues – specifically, whether there can be a generally accepted definition of “harm,” given that different people have different values. The speakers agreed that violations of individual privacy and societal norms of justice (for example, when machine-learning tools deliberately or inadvertently target protected classes or disadvantaged populations) cause first-line harm that must be remedied when detected. A more complex inquiry is whether bias in equation design, reporting and confirmation – the latter of which may create a “filter bubble” where algorithms display content depending on a user’s location, search history and other variables – facilitates strategic marketing or raises an ethical red flag. Another dilemma was whether price discrimination based on where consumers live and what technology they use (laptop versus mobile phone) to make purchases is fair, even if it’s legal.