Colorado governor vetoes block on surveillance pricing as other states push for bans

Colorado Governor Jared Polis vetoed a bill Tuesday that would have prohibited companies from using personal data to set individualized wages and consumer prices, marking the second time in 12 months he has blocked legislation targeting surveillance pricing [1][2]. The measure, House Bill 26-1210, would have been the most expansive state-level ban on algorithmic pricing in the nation [1][2]. It sought to bar corporations from deploying algorithms, statistical modeling, or artificial intelligence to tailor prices or wages based on an individual's browsing history, location, financial status, or other collected data [1][3]. While Maryland became the first state to ban surveillance pricing in grocery stores in April, Colorado's proposal applied across industries and covered both consumer goods and worker compensation [1][2]. It would have prevented ride-share firms such as Uber and Lyft from setting individualized driver payouts based on collected data, a practice documented in a 2023 study [1][2]. The bill also addressed a loophole that critics identified in Maryland's law, which does not stop companies from raising baseline prices for everyone and then offering individualized discounts [1][2]. Colorado's legislation was amended to exempt loyalty and rewards programs and transparent markdowns for students and seniors [1][3]. A handful of Democrats joined Republicans in voting against the bill before it reached the governor's desk [3][4]. In his veto letter, Polis wrote that the legislation was overly broad and would "inadvertently capture innocuous uses of technology that in no way harms – and indeed benefits – consumers and workers" [1][2]. He added that the bill would "punish differentially lower prices, not just higher prices" [1][3]. The Travel Technology Association, which represents online travel agencies and short-term rental platforms, had argued in written testimony that the measure would "prohibit pricing practices that are transparent, pro-competitive, and beneficial to consumers" while exposing platforms to litigation [1][2]. Consumer advocates condemned the veto. Pat Garofalo, director of state and local policy at the American Economic Liberties Project, said: "Governor Polis had an opportunity to stand with working Coloradans, but instead chose to side with the dominant corporations using invasive surveillance data to pick their pockets" [1]. The veto is Polis's second on the issue; in 2025 he blocked a bill that would have banned landlords from using rent-setting algorithms [1][2]. The Federal Trade Commission has documented surveillance pricing in stores selling clothing, beauty products, home goods, and hardware [1]. Under the Biden administration, the FTC released an initial study indicating companies use a wide range of personal data when setting individualized prices [1]. Current FTC Chair Andrew Ferguson has characterized that report as a rush job, and consumer advocates say federal inaction increases the urgency for state-level regulation [1]. On May 18, a bipartisan group of 16 state attorneys general wrote to the FTC asking the agency to address unfair and deceptive pricing practices, including surveillance pricing [1]. Several other states are advancing their own measures. Connecticut's legislature approved a consumer privacy bill in May that bans companies from setting individualized prices based on consumer data [1][2]. New York's state senate has passed a ban, though the assembly has not acted, and the state enacted a transparency law last year requiring companies to disclose when they use personal data to set algorithmic prices [1][2]. Similar legislation is under consideration in Illinois, California, Massachusetts, New Jersey, and Pennsylvania [2][4].