The Law and Economics of Personalization

Imagine every ad, every price, and even every contract completely tailored to you — welcome to the age of AI-driven hyper-personalization.

Today, vast amounts of consumer data are collected and processed to build individualized profiles with ever-increasing precision. This enables one-to-one interactions that evolve in real time and allow firms to influence behavior with unprecedented subtlety. Personalized marketing holds the promise of meeting consumer needs more effectively and making digital experiences more relevant and efficient. Yet this seemingly customized environment raises urgent concerns about the power of such marketing to exploit cognitive biases, reshape preferences, and deepen asymmetries in digital markets.

This book offers the first in-depth law and economics analysis of personalized marketing in the digital age. It examines how personalized advertising, pricing, and contracting challenge foundational principles of consumer protection and explores to what extent these practices are regulated under the current EU legal framework. The analysis shows that while existing rules provide some safeguards, they fall short of addressing the systemic risks posed by hyper-personalization.

To respond to these challenges, the book develops a four-part policy approach aimed at reinforcing consumer autonomy, equity, and welfare in data-driven markets and bridging the regulatory gaps that personalization opens up.

Regulating these developments involves a clear trade-off between efficiency and fairness. How much freedom do you give up in exchange for a hyper-personalized experience? How confident are you that the price you pay will not exceed what others pay for the exact same service? And what does it mean for your autonomy when an algorithm predicts your behavior better than you do yourself?

This book offers a critical starting point for future regulation and a call to rethink the role of personalization in the digital economy.