​Surveillance pricing​ ban among affordability bills proposed by Colorado Democrats

This story was originally published by Colorado Newsline.

Colorado Democrats unveiled a trio of bills Monday meant to increase affordability for consumers, including a second try at outlawing the use of personal data to set prices and wages.

“Fighting for affordability means exercising the courage to hold wealth and power accountable and to make sure that everyone, regardless of how much money they have, plays by the same set of rules,” Rep. Javier Mabrey, a Denver Democrat, said.

A yet-to-be-introduced bill would ban corporations from using someone’s personal data such as their browsing history, device type, location, shopping patterns and other demographics to set a price or wage. That practice is known as surveillance pricing and was the subject of a Federal Trade Commission study under the Biden administration. New parents, for example, might be shown a higher price for baby thermometers in their search results. People sitting in a store’s parking lot might see a higher price for an item online than someone at home.

A similar bill died in its first committee hearing late last session. This year, Mabrey, House Assistant Majority Leader Jennifer Bacon, Sen. Mike Weissman and Sen. Iman Jodeh will back the legislation. Not only is the bill coming up sooner in the session, they said, but more Coloradans this year are likely to have become aware or been affected by surveillance pricing.

“As consumers, we need to have a say in how we are treated when we go to places like the grocery store,” Bacon said. “As technology advances and (artificial intelligence) becomes more integrated in our everyday lives, practices like surveilling to set prices and wages are driving up costs for us.”

Level the Playing Field for Small Businesses

Another bill expected to be introduced in February would prohibit wholesalers from charging small businesses more than bigger retailers. Mike Callicrate, the owner of Ranch Foods Direct in Colorado Springs, said it would help level the playing field for small businesses.

“We have to compete with massive chain retailers like Walmart, Amazon, Whole Foods, Kroger, Albertsons and Safeway that externalize costs on taxpayers and communities while sourcing the cheapest products they can find,” he said. “If we want to stay in business and build resilient communities that can feed themselves, we need bold legislation to make markets fair.”

The wholesale bill will be sponsored by Sens. William Lindstedt of Broomfield and Judy Amabile of Boulder, and Rep. Kyle Brown of Louisville, all Democrats.

The bill will still allow price differences when it comes to volume purchasing and other logistics.

“But it ensures that those small businesses have the same access to wholesale prices that the largest corporations and monopolies in this country use to box out that very competition,” Lindstedt said.

Republican Defends Price Premium

The third bill in the package, House Bill 26-1012, was introduced this month on the first day of the legislative session. The measure would require retailers that sell through delivery apps like Instacart and Door Dash to display how much the delivered item would cost at the store. It would also ban retailers from artificially inflating prices to so-called captive customers, who have limited purchasing options in places like stadiums, hospitals and airports.

“Everyone has experienced the $20 beer at a Nuggets game, the $10 water at the airport or the $80 Tylenol in the emergency room, when people are forced to pay more simply because they are trapped,” Rep. Yara Zokaie, a Fort Collins Democrat, said. “That isn’t a free market. It’s exploitation.”

HB-1012 is sponsored by Zokaie, Lindstedt, Weissman and Brown.

Rep. Chris Richardson, an Elbert County Republican who sits on the House Business Affairs and Labor Committee, said in a statement that the policy would make Colorado an outlier by imposing price ceilings.

“When prices are artificially capped, demand increases while supply shrinks. Vendors cannot cover costs, quality operators exit the market, and consumers are left with fewer options, lower quality, and worse service,” he said. “The bill also ignores the reality of venue economics. Vendors in airports and stadiums pay significantly higher rent and operating costs than businesses outside those facilities. A modest price premium is not price gouging. It is what allows these businesses to stay open at all.”

The bill also has opposition from the Colorado Bankers Association, the Colorado Hospital Association, and the National Western Stock Show and Rodeo. DoorDash, Instacart and Uber are requesting amendments.

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