Ethical Considerations in AI-Powered Personalization: A Review of Industry Practices and Consumer Perspectives

Shyam B. Shukla^1*, Geeta Naidu², Shripad Joshi³, Maitreya Nalavade⁴, Chetan Puri⁵, and Satyajit S. Uparkar⁶

1 NSB Academy Bangalore, India
2 Tirpude Institute of Management Education, Nagpur, India
3 Global Business School and Research Center, Dr. D.Y. Patil Vidyapeeth (deemed to be University), Pune, India
4 Symbiosis Skills and Professional University, Pune, India
5 Faculty of Engineering and Technology, Datta Meghe Institute of Higher Education and Research, Nagpur, India
6 Department of Computer Science and Applications, Ramdeobaba University, Nagpur, India

Abstract

Artificial intelligence (AI) has transformed e-commerce by enabling highly unique and tailored customer experiences. This review examines current industry practices regarding ethical issues in AI-powered personalization in online shopping, along with consumer perspectives on these practices. AI-driven customization leverages vast amounts of customer data to predict preferences, recommend products, and enhance user experience, leading to higher satisfaction and engagement. However, it also raises significant societal and ethical concerns, including privacy invasion, algorithmic unfairness, and manipulation of consumer choices.

Many industries prioritize using sophisticated AI systems to increase customer engagement and sales. These systems analyze browsing history, purchase behavior, demographics, and social media activity. The opacity of these algorithms, combined with their potential for discrimination, poses risks to consumer privacy and autonomy. Consumer attitudes toward AI-powered personalization vary widely. While many appreciate the convenience and relevance of personalized recommendations, an increasing number express concerns about data privacy, fairness of automated decisions, lack of transparency regarding data usage, and the potential for AI systems to reinforce biases or subtly influence opinions without user awareness.

Keywords

AI-Powered Personalization, E-Commerce, Ethical Considerations, Consumer Privacy, Algorithmic Transparency

Corresponding Author

Shyam B. Shukla*, NSB Academy Bangalore, India.

Citation

Shukla, S. B., Naidu, G., Joshi, S., Nalavade, M., Puri, C., and Uparkar, S. S. (2025). Ethical considerations in AI-powered personalization: A review of industry practices and consumer perspectives. The Global Consumer Intelligence Review, 1(1), 01-18.