Voice Shoppers : From Information Gaps to Choice Gaps in Consumer Markets

Recent years have seen exponential growth in the use of voice shoppers – artificial intelligence–based algorithms installed on digital voice assistants, such as Alexa and Google Assistant, that buy products based on verbal requests received from consumers. This game-changing switch to semi-automated shopping is shaking up markets by reshaping consumer–supplier relationships, as well as the business models of suppliers and search services. Voice shoppers benefit consumers by offering speedier and more sophisticated transactions while reducing search and transaction costs. At the same time, consumers’ voluntary delegation of their search powers and product selection creates what we call a “choice gap,” wherein the voice shopper chooses the product to be offered to the consumer. This gap is distinct from the commonly recognized information gap, which exists when suppliers possess more information than consumers. The choice gap might create a misalignment between consumer preferences and the products actually sold, which harms consumers as well as the well-functioning of markets. Yet market forces cannot be relied upon to remedy this market failure. Despite the significant consequences of this market failure, the negative effects of the choice gap are currently undertreated. Consumer protection and antitrust laws are ill-suited to the task. To remedy this, we suggest that transactions conducted by voice shoppers be reviewed under agency law. Agency law enables the application of fiduciary, performance, and information duties that protect consumers’ interests in the transaction, rather than consumer choice. Such duties can reduce the choice gap, improve consumer welfare, and restore market performance. Our findings and suggestions have relevance well beyond voice shoppers, for technologies which completely automate consumer choice without any human involvement, which are the future of commerce