“AI-Powered Inferred Data Poses New Threats for Consumer Privacy”

Matthew Hays quoted in Bloomberg Law AI article “AI-Powered Inferred Data Poses New Threats for Consumer Privacy.” The article examines the growing privacy risks posed by AI tools that generate inferences about consumers—such as their health, race, income, or other sensitive characteristics—and use those inferences to influence decisions involving employment, housing, lending, and other areas. As AI-driven profiling becomes more widespread, lawmakers are increasingly focusing on regulations that promote transparency, limit discriminatory outcomes, and give consumers greater control over how inferred data is used.

Hays, a Dykema data privacy attorney, explains that inexpensive, widely available AI tools have made sophisticated consumer profiling accessible even to small businesses that may lack the resources or awareness to evaluate the legal and ethical risks. He also notes that states are beginning to regulate AI-generated inferences, particularly in automated decision-making, with new laws requiring businesses to provide greater transparency and, in some cases, allowing consumers to opt out of decisions based on AI-generated profiles.