/ Sernac issues an interpretative circular letter on the use of artificial intelligence systems in consumer relations

Sernac approved the Interpretative Circular Letter on consumer protection against the use of artificial intelligence (AI) systems. This document contains the criteria to be used by Sernac to protect consumers from risks arising from the use of AI systems by suppliers.

María Ignacia Ormeño Sarralde
Associate Attorney
Alessandri Abogados

On January 18, 2022 Sernac issued Exempt Resolution No. 33, an interpretative circular letter related to personal data and artificial intelligence (AI). This document was approved by virtue of the power granted by Law No. 21,398, also called pro-consumer law, which establishes measures to encourage the protection of consumer rights and grants powers to Sernac in relation to the processing of consumers’ personal data that takes place in a consumer relationship.

The circular letter includes the criteria to be applied by the institution to ensure the protection of consumers given the potential impact derived from the use of AI systems in the affectation of their rights and is especially related to the recent approval of the National Artificial Intelligence Policy prepared by the Ministry of Science. This document addresses consumer relations due to the influence that digital commerce has had, in addition to the use of AI in consumer interactions between suppliers and consumers.

The aforementioned circular letter notes that the use of AI systems has the potential to affect consumers. For example, through the development of self-learning algorithms, based on the collection and analysis of large volumes of data, it is possible to determine behavioral patterns or track and analyze people’s daily habits. This could enable the intentional exploitation of consumer biases, commercial practices related to customer profiling, manipulation through “dark-patterns” with increasing levels of effectiveness, and the differentiation or personalization of prices and contractual conditions to the detriment of the consumer.

Faced with these potential risks, those suppliers using AI systems should be aware of the rights enshrined in the Consumer Protection Law No. 19,496 (LDPC), mainly:

– Right to truthful and timely information (Article 3(b) of the LDPC)

– The right of choice (Article 3(b) of the LDPC)

– The right not to be arbitrarily discriminated against (Article 3(d) of the LDPC)

– Right to consumer safety (Article 3(c) of the LDPC)

In addition to the rights contemplated in the LDPC, they must contemplate the adequate treatment of consumers’ personal data, in accordance with the provisions contained in Law No. 19,628 on the Protection of Private Life (LDPVP).

Sernac, taking into account both the risks associated with the use of AI systems and the rights that must be respected by suppliers, established in the circular letter interpretative rules, in order to establish a set of criteria or guidelines tending to influence in a substantive way in any of the phases of the contractual link. Also, when an AI system constitutes a component of the products that the supplier sells or the services it renders.

The rules are divided into five sections:

1. Provision of truthful, timely and transparent information;
2. Safeguarding freedom of choice;
3. Consumer safety;
4. Prohibition of any arbitrary discrimination; and,
5. Protection of consumers’ personal data.

All sections correspond to the principles, rights and obligations contained in consumer protection regulations.

In relation to section number five, those suppliers using AI systems must pay special attention to the requirements arising from the principles of purpose, lawfulness, proportionality, confidentiality, security and accountability, as derived from the LDPVP. In addition, the use of AI systems involving the processing of consumer data must take into account that any processing of personal information must be based on a legal basis (Article 4, first paragraph LDPVP).

Review the entire Circular Letter here.