DENVER — Colorado Governor Jared Polis vetoed a bill on Tuesday that would have banned companies from using surveillance pricing to set workers’ wages and consumer prices. The legislation would have prohibited businesses from using algorithms powered by artificial intelligence or other data-processing techniques to establish individualized prices or wages based on personal information. Polis wrote in a public letter that he considered the measure overly broad, stating it would “inadvertently capture innocuous uses of technology that in no way harms – and indeed benefits – consumers and workers.” He added that the bill would “punish differentially lower prices, not just higher prices.”

The Colorado bill would have been the strongest in the nation against algorithmic pricing, applying across all industries and covering both wages and consumer prices. It included exemptions for loyalty program discounts and transparent markdowns for students and senior citizens. A 2023 study documented how ride-share companies such as Uber and Lyft used collected data to set individualized driver wages—practices the bill sought to prohibit.

Pat Garofalo, director of state and local policy at the American Economic Liberties Project, criticized the veto, saying, “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.” The Travel Technology Association, a trade group representing online travel agencies and short-term rental platforms, opposed the bill, arguing in written testimony that it 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.”

Surveillance pricing relies on personal data such as residence, purchase history, financial status, travel habits, and affiliations. The Federal Trade Commission has documented such practices in retail sectors including clothing, beauty products, home goods, and hardware.

Maryland became the first state to ban surveillance pricing in grocery stores in April, though consumer advocates criticized its narrow scope and industry exemptions. Connecticut approved a broader consumer privacy law in May that includes a ban on individualized pricing based on consumer data. Illinois, California, Massachusetts, New Jersey, and New York are also considering similar legislation.