Colorado Democrat: 'Corporate Lobby' Killing Data-Pricing Bills
Democratic state lawmakers around the U.S. want to ban algorithmic pricing, but the “corporate lobby” is killing or watering down proposals, Colorado Rep. Javier Mabrey (D) said Wednesday.
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Speaking at the Capitol Forum’s tech conference, Mabrey said he’s had discussions with lawmakers around the U.S. about bills similar to his failed proposal to ban the practice in his state.
Lacking enough Democratic support, Mabrey’s HB-1264 failed before the House Judiciary Committee on April 2. A similar measure died in California (see 2509050003), and New York lawmakers in May settled for transparency mandates instead of a ban on what Democrats have termed “surveillance pricing” (see 2508150039).
“I don’t think the transparency approach is worth much at all,” said Mabrey. “And I think a lot of the reason why is because monopoly power and increasingly fewer and fewer decision-makers are influencing what we’re paying for airline tickets” and other services online.
Mabrey and other lawmakers drew from the Biden administration FTC’s findings on the issue. Former Consumer Protection Bureau Director Samuel Levine and former Office of Policy Planning Director Hannah Garden-Monheit, speaking on the same panel, detailed how the issue is intertwined with privacy and AI regulation.
“This is a data issue as much as it is an output issue,” said Levine, now a senior fellow at the Berkeley Center for Consumer Law & Economic Justice. He noted privacy mandates on data minimization, authorities against unfair and deceptive acts like dark patterns and rules against misleading advertising all apply to data-driven pricing. “There’s a lot of legal risk out there for companies who want to engage in these practices. The fact that they still want to do so and are signing up for all these high-priced consultants indicates how profitable this business model is,” he said.
Garden-Monheit, now a senior fellow at the American Economic Liberties Project, said “this area” is “opaque by design.” The FTC’s inquiry into data-driven pricing tools turned up practices used for price-targeting, customer profiling and page ranking. Such tools determine how consumers see search results, which ultimately can result in personal pricing, she said: “We’re moving to a world in which it’s impossible to tell what’s going on, and in fact these companies, as we move toward a world of AI, they’re not themselves going to know what the algorithm is using to set this price.”
Troutman attorney Brad Weber said he handles a lot of questions about the growing patchwork of state privacy and AI regulation, which is a challenging environment even for large companies. Algorithmic pricing relies on personal data, including browsing patterns, geolocation data and credit scores, he said. “It’s something companies are very concerned about."
“It’s going to continue” because every state privacy law “somehow implicates surveillance pricing,” added Weber. He suggested there are benefits to dynamic pricing practices, such as consumers using algorithmic-driven platforms to sell sporting event tickets that would go unused otherwise.