Prohibit Surveillance Price & Wage Setting

     Surveillance data is defined in the act as data that is obtained through observation, inference, or surveillance of consumers or workers and that is related to personal characteristics, online behaviors, or biometrics of an individual or group, band, class, or tier to which the individual belongs. The definition of 'worker' in the act excludes federal and state employees and employees of public entities.

     The act prohibits discrimination against a consumer or worker resulting from the use of a price or wage setting algorithm (PWSA) that uses statistical modeling, data analytics, artificial intelligence, or other data processing techniques to analyze surveillance data, the output of which is a substantial factor in:

• Individualized price setting used to determine the amount charged to a consumer; or
• Individualized wage setting used to determine the wage offered to a worker.

     The act specifies activities that are not individualized price or wage setting, as well as exemptions from the prohibition on price or wage setting. A person has not engaged in individualized price setting if the person can demonstrate, as described in the act, that differential prices are:

• Based on differences in the cost in providing a good or service to different consumers, such as delivery distance or temporal differences, such as ride or delivery time;
• Based on publicly disclosed eligibility criteria to all persons that meet the criteria, such as consumers purchasing in volume, or to all members of a broadly defined group of consumers, such as teachers;
• Afforded on equal terms to all participants in a loyalty, membership, or rewards program or are offered in response to a consumer complaint, service disruption, request for account cancellation, or similar reason;
• Offered pursuant to a specified needs-based discount program for reduced pricing related to income or financial need, such as hospital discounted care;
• Based on a subscription or other continuous agreement that includes a monthly or other recurring price that was not informed by a PWSA; or
• Based on a refusal to extend credit on specific terms or to enter into a financial transaction based on a consumer's data in a consumer report or data required as part of the application for the financial transaction.

     A person has not engaged in individualized wage setting if the person can demonstrate, as described in the act, that the person offers individualized wages based solely on data specific to an individual worker that is directly related to worker seniority or the tasks the worker was required to perform, and the person discloses to the worker before hiring, and to all workers whose wages are set in whole or in part by a PWSA, what data is considered and how the PWSA considers the data.

     A person that uses a PWSA shall develop and publish reasonable procedures to ensure the accuracy of all data considered by the PWSA, for workers to request and receive information about what data is collected, and to correct or challenge data considered by a PWSA.

     A violation of the prohibition against individualized price or wage setting is a deceptive trade practice under the 'Colorado Consumer Protection Act' and is subject to the enforcement provisions and remedies provided in that act.


(Note: This summary applies to this bill as enacted.)