Report from Colorado Newsline
In Brief – Colorado Governor Jared Polis vetoed House Bill 26-1210, legislation that would have barred companies from using personal data and algorithmic tools to set individualized wages or prices. The bill targeted so-called “surveillance pricing,” in which businesses use data such as browsing history, purchasing habits, or other personal information to determine the price offered to a consumer or the pay offered to a worker. In his veto message, Polis argued that the measure was too broadly written and could unintentionally prohibit beneficial practices, including personalized discounts and lower price offers. Although lawmakers amended the bill to exempt loyalty and rewards programs, Polis maintained that its language still risked penalizing legitimate discounting strategies. Supporters viewed the bill as a consumer protection measure to combat data-driven price discrimination, especially as AI technology services proliferate, while critics warned it could restrict common online pricing practices and offers.
Context – Lawmakers in many states are proposing legislation to curb a wide range of “surveillance”, “algorithmic” and “dynamic” pricing practices in which retailers use data and technology to help set prices, claiming that AI will be used to raise consumer prices. One of the big dividing lines is between bills to prohibit the practice in physical stores and bills that also target online commerce. There are no reports of stores using surveillance, data and AI to apply in-store personalized pricing. It’s simply not a thing and there are too many barriers to detail here. It’s more AI science fiction. On the other hand, various kinds of individualized prices, offers and discounts have been used online for decades. Sometimes lower offers, sometimes higher. Shockingly, people only like lower price offers. Earlier this year Maryland enacted a ban on personalized pricing in larger grocery stores, which the broader business community generally accepted because it did not broadly overturn pricing practices. The New York legislature, on the other hand, has passed legislation broadly restricting pricing practices, online and offline.