Colorado Governor Jared Polis vetoed sweeping legislation Tuesday that would have become the nation's strongest barrier against algorithmic pricing schemes used to set wages and consumer prices, triggering swift backlash from consumer advocates who say he sided with corporate interests over workers.
The bill would have prohibited companies from using surveillance data, artificial intelligence, and other data-processing techniques to charge individuals different prices or wages based on their location, purchase history, financial status, travel patterns, and other personal information. It also would have barred ride-sharing platforms like Uber and Lyft from adjusting driver pay based on collected data about individual workers.
In his veto letter, Polis argued the measure cast too wide a net, saying it would "inadvertently capture innocuous uses of technology that in no way harms, and indeed benefits, consumers and workers." He raised a specific concern that the law would penalize companies offering lower prices through algorithmic methods, not just higher ones. Those arguments echoed the primary objections raised by business groups during the legislative process.
Pat Garofalo, director of state and local policy at the American Economic Liberties Project, characterized the veto as a betrayal. "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," Garofalo said.
The Colorado proposal was significantly broader than Maryland's surveillance pricing law, which became the first state ban on the practice in April. Maryland's measure applied only to grocery store prices and drew criticism from consumer advocates for containing numerous industry exemptions. Colorado's bill would have covered all industries and included protections against workaround tactics, such as raising prices for everyone and then offering individualized discounts to some customers, an approach that would remain legal under Maryland's narrower framework.
Polis is no stranger to blocking surveillance pricing legislation. This is his second veto on the issue within a year, after he rejected a bill in 2025 that would have banned landlords from using rent-setting algorithms.
Across the country, momentum for regulation is building. Illinois, California, Massachusetts, and New Jersey are actively considering similar bills. Connecticut's legislature approved a sweeping consumer privacy measure in May that included new rules restricting surveillance pricing. In New York, the state attorney general is pushing for a statewide ban, though a bill passed the state senate but stalled in the assembly. New York did enact a transparency law last year requiring companies to disclose when they use personal data to set individualized algorithmic prices.
The Federal Trade Commission has documented surveillance pricing practices in clothing stores, beauty retailers, home goods outlets, and hardware stores. Under the Biden administration, the FTC released research showing companies deploy a wide range of personal information when determining individualized consumer prices. However, current FTC Chair Andrew Ferguson has characterized that earlier report as premature, making federal action unlikely in the near term.
In May, 16 state attorneys general sent a letter to the FTC requesting the agency address what they called "unfair and deceptive pricing practices across the economy," including surveillance pricing, underscoring growing state-level frustration with federal inaction.
Business groups that opposed Colorado's bill argued it was overly broad and would disrupt competitive markets and expose companies to frivolous lawsuits. The Travel Technology Association, representing online travel agencies and short-term rental platforms, complained that the measure would "prohibit pricing practices that are transparent, pro-competitive, and beneficial to consumers."
Colorado's bill would have included exemptions for loyalty programs and transparent markdowns for students and senior citizens.
Author James Rodriguez: "Polis had a chance to lead on corporate surveillance and chose the easy path instead, leaving Colorado workers and consumers hanging while other states prove a real ban is possible."
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