Colorado Governor Vetoes Surveillance Pricing Ban
Colorado’s governor vetoed a bill on Tuesday that would have prohibited companies from using surveillance pricing to determine workers’ wages and consumer goods prices.
The proposed legislation was set to be the most comprehensive in the United States addressing algorithmic pricing. While Maryland became the first state to pass a law restricting surveillance pricing in grocery stores in April, Colorado’s bill was broader in scope.
Governor Jared Polis explained his veto in a public letter, stating that he found the legislation overly broad and expressed concern it would "inadvertently capture innocuous uses of technology that in no way harms – and indeed benefits – consumers and workers," reflecting a key concern raised by business owners. He further noted the bill would "punish differentially lower prices, not just higher prices."
Consumer advocates expressed disappointment with the veto.
"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,"said Pat Garofalo, director of state and local policy at the American Economic Liberties Project.
Details of the Proposed Surveillance Pricing Ban
The Colorado bill sought to ban companies from employing algorithms, including those powered by artificial intelligence or other data-processing methods, to set personalized prices or wages based on an individual’s collected information. This data could encompass a wide range of personal details such as residence, purchase history, financial status, travel habits, and affiliations.
Opponents of surveillance pricing argue that companies exploit such data to charge consumers the highest price they are willing to pay and to offer workers the lowest wages they are willing to accept. The Colorado legislation included exemptions for certain discounts related to loyalty programs and transparent markdowns for students and senior citizens.
This veto marks the second time within 12 months that Governor Polis has blocked legislation targeting surveillance pricing; in 2025, he vetoed a bill that would have restricted the use of rent-setting algorithms.
Growing Movement for Surveillance Pricing Regulation Across States
Several states, including Illinois, California, Massachusetts, and New Jersey, are considering bills to regulate surveillance pricing. In May, Connecticut’s legislature passed a comprehensive consumer privacy bill that included new rules prohibiting companies from setting individualized prices based on consumer data.
In New York, the state attorney general has expressed support for banning surveillance pricing. Although a bill has passed the state senate, it has not yet passed the assembly. Last year, New York enacted a law requiring companies to disclose when they use personal data to determine individualized prices through algorithms.
Maryland became the first state to ban surveillance pricing in April, though its measure was limited to grocery store items and faced criticism from consumer advocates for containing numerous industry exemptions.
Colorado’s proposed bill was more expansive, applying to various industries and covering wages as well. It would have prevented ride-share companies such as Uber and Lyft from setting driver pay based on data collected about them, as documented in a 2023 study.
The Colorado bill garnered support from many critics of Maryland’s law, who were concerned that Maryland’s legislation was diluted by lobbying efforts.
According to McBrien of the Electronic Privacy Information Center (Epic), Maryland’s law did not address alternative methods companies might use to achieve similar effects as surveillance pricing. For example, companies could raise prices universally and then offer individualized discounts. Colorado’s bill aimed to close this loophole.
Opposition and Concerns Regarding Colorado’s Bill
Critics of Colorado’s legislation agreed with Governor Polis that the bill was overly broad, arguing it could disrupt competitive markets and lead to unnecessary litigation. The Travel Technology Association, representing online travel agencies and short-term rental platforms, advocated for a narrower definition of "surveillance data" and testified that the bill would "prohibit pricing practices that are transparent, pro-competitive, and beneficial to consumers – while exposing travel platforms to litigation exposure that bears no relationship to the harms the bill identifies."
Federal Perspective and Calls for Action
The Federal Trade Commission (FTC) has documented instances of surveillance pricing in stores selling clothing, beauty products, home goods, and hardware. Under the Biden administration, the FTC released a report indicating that companies use a broad range of personal data to set individualized prices for consumers.
However, it appears unlikely that the current administration will intensify enforcement against surveillance pricing, as the current FTC chair, Andrew Ferguson, described the previous administration’s report as rushed. Consumer advocates argue that federal inaction increases the urgency for states to regulate surveillance pricing.
On 18 May, a bipartisan group of 16 state attorneys general sent a letter regarding online food delivery fees, urging the FTC to "address unfair and deceptive pricing practices across the economy," including surveillance pricing.
