The use of AI in digital marketplaces has redefined the digital marketplace landscape, offering enhanced personalization, efficiency, and consumer engagement. But it also brings about important issues as far as privacy is concerned and also a surveillance of consumer behaviour. The paper explores the role of AI in e-commerce, as well as the potential for further development of privacy and the potential for the creation of a phantom of surveillance. Based on a comparative analysis of the legal frameworks of India and internationally, including the Digital Personal Data Protection Act and the General Data Protection Regulation, the study will consider the regulatory frameworks that have been put in place to protect consumer privacy in the context of AI-driven systems. This paper would assess the effectiveness of existing privacy laws in addressing AI driven privacy issues through case studies and analysing of legal cases and international examples. It addresses key topics like dynamic pricing, data profiling, dark pattern, and the impact they have on the consumer's behaviour, and how they remove the consumer's autonomy without their consent. While the study argues that AI can enhance privacy protection through more robust consent mechanisms and data rights, it also acknowledges that AI can be a driving force for the continued exacerbation of surveillance and algorithmic harm from a lack of transparency and enforcement. Given these struggles, the paper prescribes a multi-pronged solution with algorithmic transparency, privacy by design, and stronger regulation as a means to lessen the impacts on privacy and return agency to consumers in the era of AI-influenced e-commerce. From the results, it can be concluded that the future of privacy protection and the development of AI in digital economy should be strategically balanced with ethical framework and international regulation collaboration to secure future consumer rights in digital economy.
De et al. (Fri,) studied this question.