AI is quickly becoming part of almost everything on Shopify. From product descriptions to search bar suggestions, merchants now have more tools than ever to speed up tasks and personalize shopping. With the latest Shopify Editions update, one major spotlight feature is AI-powered product recommendations. These tools promise better sales, smoother discovery, and less work.

But there’s a side to AI that Shopify merchants can’t ignore: data privacy. Personalized experiences mean data is being collected, analyzed, and used in new ways. For merchants selling to regions like the EU or California, this brings some legal responsibilities.

Let’s break down what Shopify’s AI features actually do, how they might conflict with privacy laws like GDPR or CCPA, and what you can do about it.

What Are Shopify's New AI Features?

Shopify Magic, the platform’s AI assistant, now plays a bigger role in helping merchants run their stores. One feature is AI-powered product discovery. This includes product autocomplete, personalized collections, and AI-driven recommendations based on a visitor’s behavior.

Say a customer lands on your store. They start typing into the search bar. Based on past behavior and broader machine learning data, Shopify might surface relevant products instantly. That customer may also see product suggestions on the homepage, inside the cart, or in follow-up emails.

The goal here is obvious: help people find what they want faster. And often, it works. AI can drive conversions by showing the right product at the right time.

But how does AI know what to show? This is where privacy law enters the picture.

How AI Recommendations Work (Behind the Scenes)

To make accurate predictions, AI needs data. In Shopify’s case, this could include:

• Pages the visitor viewed
• Products they added to their cart
• Past purchases
• Location and device type

Even if this data doesn’t include a name or email, it can still be considered personal under laws like GDPR if it can be linked back to an individual.

Shopify uses this information to train its recommendation models. Sometimes this data stays on the merchant’s store, sometimes it may be anonymized and added to broader data sets to improve overall prediction quality. Regardless, it counts as tracking.

And in some regions, tracking means consent is required.

What GDPR and CCPA Say About AI Personalization

Under GDPR (which applies to visitors from the EU/EEA), you must get explicit consent before collecting or analyzing personal data for advertising or personalization. This applies even to cookies that track browsing behavior for product recommendations.

That means: if you’re using Shopify Magic or any AI-powered personalization tool that tracks visitors, you need a cookie banner that offers a real choice to opt in.

The CCPA (and its update, the CPRA) works differently. In California, the focus is on giving users the option to opt out of having their data shared or sold. And yes, some types of advertising and personalization count as data sharing under the law.

So even if your store isn’t based in the EU or California, if you sell to customers there, these rules apply to you.

What Merchants Need to Watch Out For

Many merchants turn on Shopify’s AI features without realizing what’s happening behind the scenes. You might think: “I’m just using the built-in tools, so I should be fine.” But regulators don’t always see it that way.

If AI is showing different content based on visitor behavior, and that behavior is being tracked or stored, you need to disclose it. Failing to do so could lead to violations.

A common risk is not asking for consent before tracking begins. Some stores load tracking scripts (like analytics or recommendation engines) the moment someone lands on the page. That might be a problem if the visitor is from the EU and hasn’t opted in.

Another issue is not providing a way to opt out. If your site personalizes based on past behavior, visitors should have a way to opt out of that profiling.

And let’s not forget about transparency. People have the right to know how their data is being used. That means your privacy policy needs to mention automated decision-making and profiling if you use these tools.

Where to Disclose This in Your Privacy Policy

If your store uses AI-based personalization, you need to be clear about it in your Privacy policy.

Mention that your store uses automated systems to make product recommendations or adjust content. Explain what kind of data is used (like browsing activity or past purchases), and whether it's shared with third parties. Include a section about profiling and how users can opt out.

Here’s a basic example of how that might look:

"We use automated tools to recommend products and improve your shopping experience. These tools may analyze your browsing behavior, cart activity, and previous purchases. You may opt out of personalized recommendations by updating your cookie settings or contacting us."

Depending on your region, you may also need to mention if this data is processed outside of your country.

What Consentmo Merchants Can Do Today

If you’re using Consentmo for your cookie compliance, there are already steps you can take.

First, check if your AI tools or Shopify Magic features load tracking cookies. Our cookie scanner can help identify which scripts are loading and how they behave.

Next, update your banner settings to ask for consent before non-essential cookies run. For EU visitors, this means no personalization tracking before they click "Accept."

You can also add custom categories or descriptions to explain AI-related cookies. For example, label one category "AI Recommendations" and provide a short description of what it does.

And don’t forget the Privacy policy. If your store personalizes content, it's not just a feature - it’s a compliance point.

Looking Ahead: Can Shopify Merchants Use AI and Stay Compliant?

Yes - but it takes a bit more awareness.

Shopify is moving fast with AI. And those tools can bring real value. But merchants need to take a closer look at how data flows between tools, cookies, and visitor experience.

Just because Shopify offers something by default doesn’t mean it’s compliant out of the box. You are the controller of your customer’s data. That means you’re responsible for the way it’s collected, disclosed, and processed.

So if you're using smart tools, AI-powered upsells, or Magic-generated product suggestions, make sure your cookie banner and privacy policy are keeping pace.

With the right setup, you can still use Shopify’s latest tools, without creating friction, confusion, or exposure to privacy complaints.

Final Thoughts

AI in eCommerce is here to stay. The merchants who benefit the most will be the ones who understand both sides: the upside in experience, and the compliance rules that govern how those tools work.

Shopify gives you the innovation. Consentmo helps you stay in the clear. Together, that’s a setup worth building on.