No Consumer Is an Island—Relational Disclosure as a Regulatory Strategy to Advance Consumer Protection Against Microtargeting

Abstract

Presently, most business-to-consumer interaction uses consumer profiling to elaborate and deliver personalized products and services. It has been observed that these practices can be welfare-enhancing if properly regulated. At the same time, risks related to their abuses are present and significant, and it is no surprise that in recent times, personalization has found itself at the centre of the scholarly and regulatory debate. Within currently existing and forthcoming regulations, a common perspective can be found: given the capacity of microtargeting to potentially undermine consumers’ autonomy, the success of the regulatory intervention depends primarily on people being aware of the personality dimension being targeted. Yet, existing disclosures are based on an individualized format, focusing solely on the relationship between the professional operator and its counterparty; this approach operates in contrast to sociological studies that consider interaction and observation of peers to be essential components of decision making. A consideration of this “relational dimension” of decision making is missing both in consumer protection and in the debate on personalization. This article defends that consumers’ awareness and understanding of personalization and its consequences could be improved significantly if information was to be offered according to a relational format; accordingly, it reports the results of a study conducted in the streaming service market, showing that when information is presented in a relational format, people’s knowledge and awareness about profiling and microtargeting are significantly increased. The article further claims the potential of relational disclosure as a general paradigm for advancing consumer protection.