Consumer policy is facing unprecedented challenges due to enormous changes regarding communication of consumers. The Smartphone as a “spy in the pocket” is capable to collect a variety of data about its user. Processing this data can generate information about individual character traits, emotions and can even predict behavior. This opens new possibilities for firms to manipulate consumers beyond their conscious needs and desires. A threat to consumers entails that consumers believe to make decisions according to their free will, but when the decision is actually based on information about observed consumer preferences that has been predetermined. This report shows how consumers are subject to an illusion of control and which heuristics consumers have developed with respect to the disclosure of personal information. Furthermore it will can be seen how consumers can benefit from these developments and implications for consumer protection are presented.
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