Advanced International Journal for Research

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Volume 6 Issue 6
November-December 2025

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Transparency and Explainability of Algorithms from a Consumer Law Perspective

Author(s) Ms. Shibanee Acharya, Prof. Dr. Binay Kumar Das, Mr. Ashish Kumar Mishra, Mr. Omkar Acharya
Country India
Abstract The growing use of algorithmic and artificial intelligence–driven systems in digital markets has significantly reshaped consumer transactions, influencing product recommendations, pricing, advertising, and access to services. While these technologies enhance efficiency and personalization, their opaque functioning creates serious challenges for consumer protection. Algorithmic “black box” decision-making deepens information asymmetry, restricts consumer autonomy, and raises concerns regarding fairness, accountability, and trust in digital marketplaces. This paper examines the principles of transparency and explainability of algorithms from a consumer law perspective, with specific reference to the Indian legal framework. It analyses the adequacy of the Consumer Protection Act, 2019 and e-commerce regulations in addressing algorithmic unfair trade practices, misleading digital conduct, and automated decision-making. The study also explores the interface between consumer protection and data protection law, particularly the Digital Personal Data Protection Act, 2023, in regulating profiling and data-driven consumer manipulation. Adopting a doctrinal and comparative approach, the paper draws insights from international developments, including the EU’s General Data Protection Regulation and proposed AI regulatory framework. It argues that formal disclosure alone is insufficient and advocates for meaningful, consumer-centric explainability. The paper concludes by recommending legal and policy reforms to strengthen algorithmic accountability while balancing innovation and consumer rights.
Keywords Algorithm, artificial, digital, consumer, policy, marketplace, Trade
Field Sociology > Administration / Law / Management
Published In Volume 6, Issue 6, November-December 2025
Published On 2025-12-23
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E-ISSN 3048-7641
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