Colorado lawmakers say affordability is a priority. Yet during the 2026 legislative session, they passed a bill making it harder for businesses to offer consumers a better deal.
House Bill 26-1210 sought to prohibit businesses from using personal data and algorithms to set individualized prices and wages. Supporters argued that companies shouldn’t be allowed to charge customers more simply because their shopping habits suggest they’re willing to pay it.
That’s a reasonable concern. But what happens when that same technology is used to offer someone a discount?
Governor Jared Polis recognized the problem when he vetoed HB 1210 in June, warning that the legislation was too broad and could discourage legitimate consumer discounts.
He was right. Different Prices Are Nothing New
We encounter different prices for the same products and services every day. Seniors receive restaurant discounts. Students pay less for software. Grocery stores offer loyalty rewards, retailers send targeted coupons, and airlines charge passengers different fares for seats on the same flight.
Few people object when a student pays less for a movie ticket or a family uses a coupon at the grocery store.
The principle is simple: Not everyone is willing or able to pay the same price.
Artificial Intelligence allows businesses to make those distinctions more precisely. Instead of relying on broad categories, retailers can tailor promotions to individual customers based on their shopping habits and preferences.
That isn’t necessarily a bad thing.
To be clear, HB 1210 included exemptions for traditional loyalty programs, group discounts, and certain other pricing practices. But those exemptions didn’t cover every legitimate use of personalized pricing. Businesses could still face legal consequences for offering individualized discounts outside the bill’s permitted categories.
Personalized pricing benefits consumers
Consider a retailer selling a product for $100. Some customers will happily pay that amount. Others won’t buy it unless the price drops to $80.
The retailer could charge everyone $100 and lose potential customers. It could lower the price to $80 for everyone and sacrifice revenue. Or it could offer a $20 discount to customers who otherwise wouldn’t make the purchase.
Economists call this price discrimination. Despite the unfortunate name, the practice can expand access to products and services while generating sales that otherwise wouldn’t happen.
Of course, the same technology could be used to charge certain customers more. That’s why competition matters.
When consumers have alternatives, businesses have an incentive to offer better deals. A retailer that consistently overcharges customers risks losing them to competitors. Smaller businesses can use these same pricing tools to attract shoppers away from larger rivals.
Banning personalized pricing wouldn’t make markets more competitive. It would simply take away one way businesses compete.
Address privacy concerns, not discounts
There are legitimate questions about how businesses collect and use consumer information. Customers deserve protection against deceptive practices, unlawful discrimination, and misuse of sensitive data. But Colorado already has laws addressing these concerns.
The Colorado Privacy Act establishes requirements for businesses handling personal information and gives consumers certain rights over their data. Existing consumer protection laws also prohibit deceptive business practices.
Those protections aren’t a substitute for competition, but they provide a framework for addressing misconduct without broadly restricting how businesses set prices.
HB 1210 would have treated certain uses of personalized pricing as deceptive trade practices, even when they resulted in a lower price for the consumer. That approach risks punishing businesses for offering deals rather than protecting customers.
A discount offered to one customer isn’t automatically a penalty imposed on another. Nor does charging everyone the same price guarantee a better deal.
Personalized pricing can be abused, particularly in markets where consumers have few alternatives. But it can also help families stretch their budgets, allow small businesses to compete, and make products affordable to people who otherwise wouldn’t buy them.
Governor Polis was right to veto HB 1210. Colorado lawmakers should focus on protecting consumers from fraud, safeguarding their privacy, and preserving competition, not deciding which discounts businesses are allowed to offer.
Sometimes, different prices are exactly what make markets work.
Vanessa Rutledge is senior fellow in emerging technology at Independence Institute, a free market think tank in Denver.
