Colo. Lawmakers Urged to Pass Surveillance Pricing Bill

HB-1264 “in essence prohibits surveillance data to set prices and wages,” said Rep. Lorena Garcia (D), one of its sponsors. “Our information is being taken from us and being used against us. What this bill is doing … is prohibiting that practice.”

However, some committee members pushed back. “Is there evidence of real-life situations of any kind of price surveillance happening in Colorado, especially outside of the current protection of privacy and AI under statute?” asked Rep. Ryan Armagost (R).

Rep. Cecelia Espenoza (D) asked how the subject of the bill differs from the way cookies and caches have been dealt with for decades. Rep. Jennifer Bacon (D) asked if consumers understand things they are agreeing to when they assent to terms of service or user agreements.

Sophie Mariam, labor policy analyst at the Colorado Fiscal Institute, said the bill will tackle unfair tactics. “Corporations are increasingly using algorithmic wage setting to suppress wages, deepening structural inequalities, reinforcing systemic discrimination and extracting wealth from workers who are least able to afford it,” she said. “Surveillance wage setting allows corporations to monitor and lower pay in real time, basically holding these algorithmic puppet strings to manipulate their workforce while shirking accountability.”

Nina DiSalvo, policy director with Towards Justice, agreed with Mariam on her point about workers but also said this hurts consumers. “Surveillance prices allow large corporations to identify the most a particular consumer is willing to pay, or the least a particular worker is willing to accept based not on the value of the good or service, but on the urgency with which that particular individual needs it."

A rideshare driver with Colorado Independent Drivers United said surveillance pricing has hurt his job and livelihood. “The last two years [have] been a disaster,” he said. “My income went down 40% because of the AI system Uber and Lyft used to provide drivers. My race, my gender and my immigration status [are] used to set up my pay,” and “Black, immigrant and Latino drivers are getting less pa[id] ride offers compared to white drivers.” Several other rideshare and delivery drivers -- and someone who has studied working conditions of the gig economy for almost a decade -- offered similar testimony.

Fordham Law School antitrust law professor Zephyr Teachout also supported HB-1264. “There is a long history of using precisely this kind of law to protect small businesses, consumers and workers,” she said. “This law empowers small businesses to compete based on quality service and community trust, not how much data they can hoard or how ruthlessly they can manipulate.”

Joshua Mantell, director of government affairs at the Bell Policy Center, agreed. “For a true free market to flourish, we need to ensure that everyone gets the same information, and big corporations cannot rig the system for their own profits, while workers, consumers and small businesses without a big market share are stuck with the bill,” he said. “With consumer protection being dismantled more and more every day at the federal level, it has never been more important for Colorado to lead the way for consumers, workers and small businesses who cannot dictate market conditions like large corporations.”

American Civil Liberties Union-Colorado policy fellow Mika Alexander said the bill “promote[s] the usage and implementation of technology in ways that protect our civil liberties, limit[s] the collection of our personal information and ensure[s] the security of our private data” by “establishing safeguards to protect workers and consumers in Colorado from the potential harms of surveillance, pricing and wage setting practices.”

A Colorado official and others opposed the bill. Michael McReynolds, legislative liaison for the Governor’s Office of Information Technology, said this bill is duplicative. “Any efforts to clarify or strengthen employment discrimination laws should be addressed within those existing frameworks, rather than creating a patchwork of regulations within Colorado consumer protection laws,” he said.

David Shapiro, chief legal officer at digital promotion network Ibotta also opposed the bill. “The consumer understands that their personal information will be used to benefit them in two ways: first, to help ensure they receive personally relevant discount offers, and second, to confirm that they actually purchase the item and unlock their savings,” he said. “There's no taking of information. There's no using of information against them. It is permission-based.”

Drea Modugno, senior manager of government affairs at the Denver Chamber of Commerce, worries the bill "takes a very broad approach to fit a single regulatory framework into two separate complicated and complex subject matters, creating significant legal and operational uncertainty for businesses at a time in which our state is already struggling to implement and understand the nation's first and most comprehensive AI regulation,” she said. Meghan Dollar, from the Colorado Chamber of Commerce, also said the bill “will have the effect of prohibiting and disincentivizing the use of modern technological systems to make the workplace more efficient.”

TechNet and the Colorado Bankers Association stressed using existing frameworks to tackle these issues as well. The Colorado Technology Association also opposed HB-1264 over concerns that it will discourage innovation and investment, negatively harming the state’s technology industry.

At the end of the hearing, Committee Chair Javier Mabrey (D) said the committee would lay over the legislation for action only so further amendments can be worked on. “We'll hope to pick this bill back up next week or the week after,” he said.