Smart “Surveillance Capitalism” and Consumer Protection Through the Principle of Transparency

Algorithms need to be regulated on the basis of transparency. This article is a literature-review approach and discusses how the principle of transparency is applied in relation to the effects of Surveillance Capitalism on consumer’s interests in the European Union (EU). In recent decades, capitalism has been digitally transformed through the commercialization of the digital traces left by users on the internet or on other computer-mediated activities (e.g., smart watches). The study, based on Zuboff’s term Surveillance Capitalism, focuses on the application of Artificial Intelligence (AI) to consumer’s data. AI is omnipresent and powered by huge amounts of data (big data) for training, testing, and validating the AI models. This is a literature review based on well-known databases and the critical evaluation of findings from different sources, with the aim of creating a coherent and comprehensive understanding of the topic. After developing a common understanding of the transparency condition through the prism of General Data Protection Regulation (GDPR) and Artificial Intelligence Act (AI Act), the study engages with the question how we can balance competing requirements, such as economic advantages on the one hand, and private autonomy on the other. Business profits put at stake the consumer’s interests in data protection, privacy, and in not being misled or manipulated. The study highlights specific challenges for the future and concludes by observing that AI in a business and digital context can be deployed in a “transparent” way that is consistent with the GDPR in favor of the consumer’s interests. In that way, AI may serve people and lead to economic and social prosperity. The legal implications for consumers and AI systems are discussed. Regulators, policy-makers, market operators, and AI system developers will benefit from this research.