Harmful Manipulation, Deception and Exploitation between AI Prohibited Practices and Unfair Commercial Practices

The AI act has introduced novelties and, above all, restrictions for certain artificial intelligence practices in Europe. Some of these are similar to prohibitions already present in the rules against unfair commercial practices. In this brief article, we will see how these rules interact for better consumer protection.

Regulation (EU) 2024/1689 of the European Parliament and of the Council of 13 June 2024, laying down harmonised rules on artificial intelligence, prohibits, in Article 5, certain AI practices considered particularly harmful and abusive, and in contradiction with EU values of human dignity, freedom, equality, democracy and the rule of law and fundamental rights.

The first two AI practices prohibited by Art. 5 are the (i) AI-enabled manipulative techniques, that can be used to persuade people to engage in unwanted behaviours, or to deceive them by nudging them into decisions in a way that subverts and impairs their autonomy; and the (ii) AI systems that exploit the vulnerabilities of a person or a specific group of people due to their age, disability, or a specific social or economic situation.

The two prohibited AI practices above have the following aspect in common; the AI technique must have ‘the objective, or the effect of materially distorting the behaviour” of a person or a group of people. The requirement of the distortion of behaviour as the practice is to lead a person to take a decision that he would not otherwise have taken expressly: this recalls the discipline of unfair commercial practices set out in Directive 29/2005/EC

As is well known, Article 6 of the directive prohibits a practice that misleads the average consumer and “causes or is likely to cause him to take a transactional decision that he would not have taken otherwise”, while Article 8 prohibits an aggressive practice that “significantly impairs or is likely to significantly impair the average consumer’s freedom of choice or conduct with regard to the product and thereby causes him or is likely to cause him to take a transactional decision that he would not have taken otherwise”.

As expressly recalled by the Regulation in Recital 29, the prohibition of manipulative AI practices is complementary to the provisions on unfair commercial practices.

First of all, let us recall the different scope of application of the two disciplines: Directive 29/2005/EC applies only to commercial practices, i.e., those practices carried out by a trader against a consumer; on the contrary, the Regulation, Art. 2(10), applies to any use of an AI system, excluding that carried out by ‘deployers who are natural persons using AI systems in the course of a purely personal non-professional activity’.

Thus, if the AI practice is carried out by a trader against a consumer, and is misleading or aggressively restricts the consumer’s ability to self-determine, it will be prohibited even if it does not cause significant harm, but only for causing the consumer to make an economic decision that he would not otherwise have made, like any unfair practice, regardless of the measures used.

In the case of unfair commercial practices implemented through AI systems that cause significant harm, a problem of concurrence of norms may arise. Should the sanction provided for in Article 99 of the IA Regulation therefore be applied, or that provided for in Article 13 of the Unfair Commercial Practices Directive, which is lower?

One might think that the Directive would continue to apply as lex specialis. But in reality, as we have just seen above, the provisions are not perfectly overlapping, in particular as regards the consequences of deception or manipulation. If the consequences consist only in the fact that the consumer has taken an economic decision that he would not otherwise have taken, the Directive will apply, because one of the constituent elements of the prohibition in Article 5(1)(a) of the Regulation, namely significant harm, is missing. Conversely, if the practice causes significant harm, not necessarily of an economic nature, the Regulation will apply. Both disciplines may apply, particularly in cases where the economically harmful consequences have been modest, but have been significant in terms of physical or psychological health.