The Subscription Economy: Protecting Consumer Rights in Personalized Offerings

Written by Pearl Kapoor on Saturday, 12 August 2023. Posted in Feature Article


Photo by Austin Distel on Unsplash

In an ever-changing e-commerce landscape, the subscription economy and its impact on AI ethics in personalized offerings have been a significant topic of discussion in the business and tech communities. With the rise of e-commerce and constant online shopping, continuous subscription-based services or products have contributed to the growth of the subscription economy. Offering a plethora of services, the subscription model has gained considerable traction across all industries. However, businesses must consider consumer rights and AI concerns to ensure a stable, engaged, and loyal customer base. 

Role of Personalization 

The subscription economy serves the rising demand for personalization. Companies with consumer data and patterns leverage AI technology to cater to individual needs. Apps and businesses leverage customer data to offer personalized experiences, tailored discounts, and curated content, fostering a sense of exclusivity and convenience that enhances customer engagement and loyalty.

Data Privacy and Consumer Rights

Nevertheless, with great personalization power comes the responsibility to safeguard consumer data and protect their rights. Data privacy concerns, fueled by data breaches and mishandling incidents, have caused consumer demands for transparency. Ensuring compliance with data protection regulations is a legal necessity and a trust-building exercise, as customers have rioted about where their data is being outsourced seen through the TikTok court case recently. Netflix and Spotify, both leading platforms of this decade, have been accused of misusing consumer data, both through algorithms which intensely observe its users' activities. However, both companies have taken significant steps to ensure transparency and regulatory compliance. Through their willingness to ensure their customers’ safety and privacy, these apps have proven their dedication to the best possible customer service and gained support from millions of users globally.  

Role of AI Ethics

As AI use remains legally unregulated, problems such as intellectual property infringement, plagiarism, transparency, and algorithmic bias have come under scrutiny. All algorithms learn from the vast consumer data collected through companies' databases. If this data contains preferences or reflects societal prejudices, the algorithms can inadvertently perpetuate these biases in their decision-making processes. For instance, biased algorithms may lead to discriminatory pricing practices, unequal access to products or services, or reinforce existing societal inequalities. Companies must regularly audit their AI systems to address this, actively identify and mitigate biases, and maintain transparency in their algorithms' functions. Another critical aspect of AI ethics is transparency. Consumers have the right to understand how AI algorithms impact their experiences, influence recommendations, and determine pricing. Businesses should communicate openly with customers about using AI and data, clearly explaining how personalization works and what data is collected. Transparent AI practices can help build trust and foster a sense of control among consumers, assuring them that their preferences and privacy are respected. It is essential for the targeted consumers to trust corporations with their data to use applications and services to the fullest extent without worrying about information breaches or identity theft. 

The subscription economy offers a compelling vision of commerce, where personalization and continuous value delivery reign supreme. However, this vision can only be fully realized by addressing the critical issues of data privacy, consumer rights, and AI ethics. Businesses must be proactive in adopting responsible practices, transparently handling consumer data, and ensuring that their AI algorithms promote fairness and inclusivity. As consumers embrace the convenience and customization of subscription services, the corporation must ensure responsible use of the data they collect. By prioritizing consumer interests and upholding AI ethics, companies can build lasting relationships with their subscribers and contribute to the sustainable growth of the Subscription Economy. In this interconnected world, success lies in empowering consumers while fostering innovation responsibly.

About the Author

Pearl Kapoor

Pearl Kapoor

Pearl is a Business Features Writer at Girls For Business.

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