ARTIFICIAL intelligence (AI) technology and automated decision-making processes are developing rapidly and have become increasingly common in areas such as finance, healthcare and education.

However, the European Parliament has warned that reliance on the technology can pose threats to consumers, particularly where decisions are made without human oversight.

Machine learning relies on pattern recognition in datasets, which the parliament said can perpetuate social divides. It highlighted that some algorithms used in hiring staff had been found to be biased against women.

Development of the technology also presented challenges for consumer trust and welfare and people had to be properly informed about how it functions.

The parliament said the European Commission had to clarify how it planned to ensure consumers were protected from unfair and discriminatory commercial practices as well as risks entailed by AI-driven professional services.

German Greens MEP Petra De Sutter, who chairs the internal market and consumer protection committee, said: “We have to make sure that consumer protection and trust is ensured, that the EU’s rules on safety and liability for products and services are fit for purpose in the digital age.”

A resolution to be voted on by MEPs later this month calls for existing liability and product safety frameworks to be adapted to cover AI involvement.

“The applications, opportunities and challenges are numerous and encompass virtually all sectors of the internal market,” said De Sutter.

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“They offer great potential in terms of innovative and higher-quality products and services, but various challenges need to be addressed in order to realise this potential. Consumer choice, trust and welfare must be guaranteed.

“Services and goods using AI and automated decision-making bring with them the risk of consumers being misled, discriminated against or even harmed, for example in relation to differentiated pricing or to automated professional services carried out without human oversight by highly skilled professionals.

“The existing EU product safety and liability frameworks may need to be adapted to cover new AI enabled products and services, in order to ensure free movement throughout the single market, and in order that businesses and consumers are protected from harm and receive compensation if harm does occur.”

She said this was especially important where products and services had automated decision-making capabilities.

De Sutter added: “What initiatives will the Commission undertake to ensure that the EU safety and liability frameworks are fit for purpose and give market surveillance authorities and other competent authorities adequate means and powers to act?”