Colorado moves to restrict surveillance pricing
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Illustration: Natalie Peeples/Axios
This is surveillance pricing: A plane ticket that costs more because you searched online for an obituary and need to travel. Or a parent who gets offered a lower salary because her social media mentions a sick child who needs health insurance.
Why it matters: Both scenarios show how companies can set individualized pricing and wages — often using artificial intelligence or algorithms — based on personal characteristics, online behaviors and biometrics.
Driving the news: Colorado lawmakers want to prohibit surveillance pricing, in particular, those systems that discriminate against consumers and workers. A Senate committee advanced the measure at a hearing on Tuesday.
- In situations where algorithms can set prices, companies would need to publish their procedures to ensure the accuracy of data and give consumers the ability to correct it, per the bill.
- State Sen. Mike Weissman (D-Aurora) said the legislation is intended to "protect people from abusive businesses."
Caveats: The new restrictions would include numerous carveouts, such as voluntary membership and loyalty programs. They also would not apply to federal, state or local government workers.
What they're saying: "There's no transparency, no accountability and no way for consumers and workers to know what's happening behind that curtain," state Sen. Iman Jodeh (D-Aurora), a bill sponsor, said at a rally Tuesday ahead of a legislative hearing.
The other side: The business community testified that the legislation is too far-reaching and would disrupt normal business practices, including those that benefit consumers.
The big picture: Nationwide, the debate is one of the top issues in state legislatures this year as lawmakers push for added disclosure and protections for vulnerable populations.
- More than 40 related bills to regulate surveillance pricing were introduced in two dozen states, industry experts note.
