BEIJING (CAIXIN GLOBAL) – A government-backed Chinese consumer group has accused the country’s tech giants of using their data-driven algorithms to âintimidateâ consumers and put them at a disadvantage.
At a symposium on the topic hosted by the China Consumers Association (CCA) on January 7, the group released a three-section, 14-point paper describing how data-driven algorithms infringe on consumers’ rights in their interactions. with great technologies. platforms and calling for increased powers for regulators.
It’s the latest sign that technology widely described as “artificial intelligence” – and in particular algorithm-based advertising and sales – is emerging as a new front in the country’s push to control big tech. And it comes amid a larger national conversation about how tech giants are using their technology to control what information is available to individual consumers and leverage their access to personal data for profit.
Some of the grievances the CCA has listed include complex sales promotions that mask the true costs of a product, targeted search results that create information asymmetry, and the practice of hiding negative reviews, which it says , leaves consumers “squeezed by algorithms and targets of harassing technologies.”
The group is particularly concerned about the practice of “algorithmic price discrimination”, where the personal data of an online shopper is used to calculate different prices for different people based on what they might be willing to pay.
The CCA has proposed a series of remedies, including the creation of a special organization to oversee algorithmic ethics and investigate âunfair algorithmsâ and provide government departments with the capacity to regulate them.
He also controversially calls on tech giants to be forced to turn over what has been described as their “secret sauce” – the proprietary algorithms that underpin their business – to regulators in the event of a dispute.
The document released by the government-backed group is seen as the latest evidence that China is preparing to release draft regulations on artificial intelligence and algorithms.
The CCA called on “all sectors of society to work together forâ¦ the fair and reasonable application of algorithms, and to prevent operators from using algorithms to do evil.”
The document from the semi-official group, which contributed to the landmark 1993 Consumer Protection Act, but is now best known for issuing reports of faulty products and services on the occasion of the annual Day of Consumers. consumer rights in China, is not legally binding.
But Clement Chan, a law professor at the University of Hong Kong specializing in Chinese data law, said the contents of the document are “meticulous” and can be “mentioned by judges, and can have a convincing basis.”
“It could also be a clue to what regulators are planning. Or just let the Consumers Rights Association test the waters and see how the general public and in particular the (tech) industry react,” he said. declared. Chan further said it was not clear how a provision in the guidelines that such algorithms should promote âsocialist core valuesâ could work in practice.
A number of legal observers told Caixin they expected one of China’s bodies with jurisdiction over tech companies – such as the Cyberspace Administration of China or the Ministry of Industry and Commerce. Information Technology – publishes draft regulations on algorithms and artificial intelligence later this year.
Chan said the push should be seen against the backdrop of a widespread crackdown on how private companies use personal data in China. But the CCA document could also suggest that regulators could examine the use of consumer protection law to further control big tech. âIt’s like in the United States, competition (the law) is a very useful legal weapon to regulate Internet giants,â Chan said.
Consumers in the dark
Also intriguing, said Nicolas Bahmanyar, data privacy consultant at Leaf Law Firm, is that if the recommendations are incorporated into a regulation, it would require tech companies to prove that their algorithms aren’t targeting people unfairly.
“That’s a very interesting messageâ¦ the consumer association says we understand the (bad) effects, but we don’t understand the causes, and we want businesses to tell us the causes.”
âUsually, if you claim something bad happened, it’s up to you to prove it. The logic of the consumer association is that it should be up to the tech company to explain it. It really highlights the complexity of this technology and its seriousness – informing the user base is, âhe said.
Bahmanyar said he expects a draft “AI safety and ethics” regulation to be released in China by the end of the year. “Because everything is in place – we have the 2019 white paper, we have the TC260 guidelines, now we have the consumer push. The next logical step is for the regulator to publish a draft.”
The TC260 is a government committee that sets national standards on cybersecurity and data protection.
China’s Personal Information Protection Bill, which is currently following the legal process, also contains provisions on the impact of algorithms on individual rights, with the current draft stating that “the use of personal information for automated decision-making must be done in a transparent, fair and reasonable manner. “
With new restrictions threatening to eat away at the underlying business model of the entire internet industry – which relies heavily on algorithmic recommendations and algorithm-based advertising to support free services – it remains to be seen whether There will be a backlash from an industry already hampered by antitrust investigations and new regulatory interest in data protection.
âUsers need to protect their privacy and businesses need to make money,â said Fang Yu, director of the Internet Law Research Center of the Chinese Academy of Information and Communications Technology. âPrivacy has a cost, and who will pay that cost? It was important to find a balance, he said.
An internet advertising industry insider, who asked not to be identified in order to be able to speak freely, said that Chinese tech companies’ use of data has become laissez-faire and chaotic, and that it would not be easy to rule. does not work, âthey said.
“At the moment, I don’t think there is a clear line between what is healthy and what is not – anything goes,” Bahmanyar said. âWhat is needed is to define what is healthy, what is acceptable, then the application. Everyone agrees that we should put up signs, but no one has found what is right. ‘it had to be said. “
This story was originally published by Caixin Global.