ALI-ELI Webinar on the Use of Automated Decision-Making and Consumer Law


The Webinar, held on 8 February, provided a stimulating forum for a transatlantic conversation

Pascal Pichonnaz (Chair; ELI President; Professor, University of Fribourg) opened the webinar by welcoming speakers and attendees.

Florencia Marotta-Wurgler (Co-Reporter of the ALI Restatement on Consumer Contracts; Boxer Family Professor of Law, NYU Law) talked about the extent to which the ELI Interim Report on EU Consumer Law and Automated Decision-Making applies to developments in the US and how it relates to the ALI Restatement on Consumer Contracts. She said that ELI’s Interim Report goes beyond information gathering by creating legal obligations. She touched upon two main issues in the ELI Interim Report and made parallels with the US law and the ALI Restatement: the notion of attribution and the application of traditional consumer law to the actions of digital assistants.

Christoph Busch (Co-Reporter of the ELI Report on EU Consumer Law and Automated Decision-Making; Professor, University of Osnabrück) and Teresa Rodríguez de las Heras Ballell (Co-Reporter of the ELI Report on EU Consumer Law and Automated Decision-Making; Professor, University Carlos III Madrid) presented the ELI Interim Report and its main findings. The Interim Report is part of a broader project on Guiding Principles and Model Rules on Algorithmic Contracts, which began in 2022. It was approved by the ELI Council in December 2023 and will be revisited prior to the completion of the broader project.

The Interim Report looks at whether EU consumer law is ADM ready, ie whether it can adequately deal with the widespread use of ADM. The Report also looks at what, if anything, needs to be done as a minimum to the acquis to enable the use of ADM without jeopardising current levels of consumer protection. In doing so, the entire life cycle of a contract from pre-contractual negotiations to discharge and remedies for breach was considered. In assessing ADM readiness, 8 Principles were developed which the team considered should govern the way in which we look at the use of digital assistants:

1.  Attribution of Digital Assistant’s Actions

2. Application of Consumer Law to Algorithmic Contracts

3. Pre-Contractual Information Duties Continue to Apply

4. Disclosure of Use of Digital Assistants 30

5. Non-Discrimination Principle and ‘No Barrier’ Principle Regarding the use of Digital Assistants

6. Protection of Digital Assistant from Manipulation

7. Ability to Determine Digital Assistant Parameters and Disclosure of Pre-Set Parameters

8. Digital Assistants and Conflicts of Interests

John Linarelli (Members Consultative Group, ALI Restatement on Consumer Contracts; Professor, University of Pittsburgh School of Law) commenced by outlining data showing how very little online shoppers read or access selling agreements. He argued that since consumers do not read contractual agreements and/or they are not able to understand their entirety, the law needs to protect them with means other than contract law. He believes that there has been a shift from the idea of contract as consent to the idea of contract as a product that can only be concluded as it is  and consequently argues that protection should be provided by law.

Jeannie Paterson (Professor, University of Melbourne) commented on the recommendations of the ELI Report and how they would interact with Australian law. In particular, she commented upon Principles 1, 5, 6 and 8, which could consistently find application in Australia, and on some possible points of inspiration that Australia could draw from the ELI Report, including the unfair terms and commercial practices, ex ante design, and Principle 7 on the ability to determine digital assistant parameters and on the disclosure of pre-set parameters.

The presentations were followed by a lively Q&A session.

The recording of the webinar is available below.