Colorado Governor Jared Polis on Tuesday vetoed a bill that would have prohibited companies from using artificial intelligence or other data-processing techniques to set individualized prices and wages based on the personal information of consumers and workers. The measure, described by consumer advocates as the strongest state-level attempt to regulate surveillance pricing, drew national attention as a growing number of states weigh restrictions on the practice.
Polis, a Democrat, wrote in a public letter explaining his decision that the legislation was overly broad and would “inadvertently capture innocuous uses of technology that in no way harms – and indeed benefits – consumers and workers,” echoing concerns voiced by business groups and industry trade associations. He also said the bill would “punish differentially lower prices, not just higher prices.”
The veto drew sharp criticism from consumer advocacy groups. “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,” said Pat Garofalo, director of state and local policy at the American Economic Liberties Project, in a statement.
The Colorado bill proposed banning companies from using algorithms to customize prices or wages based on data such as an individual’s location, past purchases, financial status, travel habits, and affiliations. Critics of surveillance pricing argue that companies exploit such data to charge consumers the maximum they are willing to pay and to pay workers the minimum they will accept. The measure included exemptions for certain loyalty-program discounts and transparent markdowns for students and senior citizens.
This is the second time in 12 months that Polis has rejected a surveillance pricing bill. In 2025, he vetoed a measure that would have banned landlords from using rent-setting algorithms, citing similar concerns about overbreadth.
Maryland became the first state to ban surveillance pricing in April, though that measure was limited to prices for grocery store items and was criticized by consumer advocates for containing industry carveouts. Colorado’s bill was far broader in scope, applying to companies across all industries and covering wages as well as consumer goods. It would have prevented ride-share firms such as Uber and Lyft from setting individualized wages for drivers based on data collected about them, a practice documented in a 2023 study.
Critics of the Colorado measure, including the Travel Technology Association, argued the rules were too broad and would disrupt competitive markets and expose companies to unnecessary litigation. The trade group called for a narrower definition of “surveillance data” and said the bill 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.”
Several other states are moving ahead with their own efforts. Connecticut’s legislature approved a sweeping consumer privacy bill in May that includes new rules banning companies from setting individualized prices based on consumer data. Illinois, California, Massachusetts, and New Jersey are also considering surveillance pricing legislation. In New York, a bill that would ban the practice has passed the state senate but not the assembly; the state enacted a transparency-focused law last year requiring companies to disclose when they use personal data to set algorithmic prices.
The Federal Trade Commission under the Biden administration released a study documenting examples of companies using personal data to set individualized prices in stores selling clothing, beauty products, home goods, and hardware. However, the current FTC chair, Andrew Ferguson, characterized the previous administration’s report as a rush job, making federal action unlikely. Consumer advocates say the lack of federal oversight adds urgency to state-level efforts.
On May 18, a bipartisan group of 16 state attorneys general wrote to the FTC asking the agency to “address unfair and deceptive pricing practices across the economy,” including surveillance pricing. The letter specifically cited concerns about online food delivery fees.