A closely divided House committee advanced a bill aimed at curbing the use of personal data to set individualized prices and wages, reviving a proposal that failed last year and setting up a broader debate over how far the state should go in regulating algorithm-driven business practices.

Proponents argued that the proposed new regulations are necessary in the digital age, in which pricing — they claimed — has been “gamified” and the system no longer resembles a free market but “economic exploitation dressed up as technology.”

Critics said companies are deploying artificial intelligent to better understand their customers and the proposal means the government injecting itself into issues of pricing and offerings, adding there is conjecture but no evidence to support claims that data surveillance is being used against consumers.

House Bill 1210, sponsored by Denver Democrats Rep. Javier Mabrey and Assistant Majority Leader Jennifer Bacon, is a reincarnation of a proposal that Mabrey sponsored with Rep. Lorena Garcia, D-Adams County, last session. That bill sought to prohibit the use of surveillance data — defined as data obtained through “observation, inference, or surveillance of consumers or workers that is related to personal characteristics, behaviors, or biometrics” — to set individualized pricing or wages, with exceptions for business practices, such as rewards programs and certain discounts.

The 2026 version passed on a 7-6 vote in committee, with all Republicans and Democratic Rep. Bob Marshall of Highlands Ranch voting against it.

The proposal now moves on to the House floor for debate, with sponsors saying they are willing to continue conversations with the business community about the latter’s worries.

Last year’s version of the bill failed to pass the House Judiciary Committee.

This year, the bill has been assigned to a different committee. Mabrey said he and Bacon worked closely with business groups to address their worries.

Corporations are buying and selling consumers’ personal data and using it to determine how much to charge them for everything from plane tickets to groceries, Mabrey said.

He cited a study conducted in Los Angeles, in which rideshare drivers sat together in a room and simultaneously searched for rides. According to Mabrey, drivers were offered different prices for the same ride 63% of the time.

“That is not the free market. That is economic exploitation dressed up as technology,” he said. “That is the gamification of our economy, and if we don’t act as the state of Colorado, these practices will accelerate. The window to establish meaningful guardrails is now before this becomes so embedded in our economy that it is impossible to unwind.”

The market is no longer dictated by supply and demand, Bacon added.

“Instead, all of us are playing against a supercomputer when we go to the grocery store,” the Democrat said.

Corporations are using data on consumers’ vulnerabilities to set wages and prices, such as charging individuals with Celiac Disease more for gluten-free products, she said.

Mabrey and Bacon emphasized that the bill does not prevent loyalty programs and dynamic pricing based on supply and demand.

“It’s about ending the use of surveillance data to figure out the maximum price you specifically will pay, or the minimum wage you specifically will accept,” Mabrey said.

With consumer protections being “dismantled more and more every day” by the federal government, it has never been more important for Colorado to be a leader in consumer protection, claimed Joshua Mantell of the Bell Policy Center.

The bill not only protects consumers but also small businesses, Mantell said, because they often purchase goods from large-scale wholesalers.

Mandell argued that, while the use of personal data is “partly the price to pay for living in this digital age,” it doesn’t mean that information can be used to reduce wages or increase prices.

“The market dictates prices and wages, not algorithms,” he said.

‘A concerning precedent’

Rebecca Hernandez of the Denver Metro Chamber of Commerce said businesses are using artificial intelligence to better understand their customers and compete in the marketplace — and this year’s House Bill 1210 would restrict how they can do that.

“This bill establishes a concerning precedent,” she said. “It opens the door for government to limit how businesses compete on price and what types of offers they can make to their customers.”

Hernandez said the bill’s provisions are too broad and vague and could result in companies eliminating their loyalty and discount programs.

Kouri Marshall of the Chamber of Progress argued that there is no actual evidence of data surveillance being used to harm consumers.

“No one has demonstrated that consumers are being systematically overcharged through personalized pricing,” he said.

He noted that while an oft-cited Federal Trade Commission report found that corporations have the capability to cause harm through data surveillance practices, it stopped “well short” of finding that such harmful practices currently exist in a large scale.

“We heard the sponsors make a lot of claims about surveillance pricing today, but they just didn’t present any evidence to support their claims,” Marshall said.