> Republican Rep. Chris Richardson, an Elbert County Republican, argued that the bill is too broad and could regulate standard analytic usage in the workplace, such as a human resources software that recommends a pay band for employees based on performance.
He does not think this is is just selling it further? Oh no, it might prohibit software automatically determining my wages, how could we even have a society if we don't let computers figure out the least they can pay me without me quitting.
“I absolutely agree that consumers and wage earners should not be exploited by the use of their data,” he said. “But it’s still overly broad and it’s still overly vague in very important parts. And I believe it’s overly simplistic in its definition of wage setting.”
I like the idea, but I'm not sure how enforceable it will be in practice. It seems like it would be relatively difficult to prove a company is using surveillance pricing, and companies may just accept the risk of paying a fine.
If you can do traffic interception, there's a pretty good chance there's going to be traces of price levels in the API and the analytics. Especially since it's probably going to be bolted on to the side of anything PCI compliant. If there isn't, then it's probably going to be really easy to subpoena to prove mens rea, because getting that right is tricky and requires a fair amount of review and coordination.
It's actually not that hard to prove. For example, PSN now has dynamic pricing for their games which can vary quite wildly and all it takes is a small number of consumers with price differences to prove it. The same is true for grocery stores or whatever else.
Enforcing it is another question though and you're right that companies will likely just accept the fine. It's all the more reason why this sort of thing needs to aggressively be legislated against and denied.
Going to be interesting to see how this affects Uber prices in Colorado. afaict Uber heavily engages in surveillance pricing but claims otherwise, deferring to 'discount' terminology.
The attorney general or a district attorney may bring a civil action on behalf of the state against a person that violates the prohibition against individualized price or wage setting based on surveillance data to seek the imposition of civil penalties. In addition, a person aggrieved by a violation of the prohibition specified in the bill may bring a civil action on behalf of themself or a group of similarly situated persons to restrain further violations and to recover damages, costs, and reasonable attorney fees.
A violation of the prohibition against individualized price setting or individualized wage setting is a deceptive trade practice under the "Colorado Consumer Protection Act".
Allowing private right of action means this will be weaponized by attorneys in the same way the ADA has. Just scanning the bill, any small business in the US using dynamic pricing, targeted discounts or "VIP pricing" on their website would be open to suits from Colorado residents. The definitions are extremely broad and there is no safe harbor for small companies either. Damages are also uncapped and apparently Colorado allows treble damages for CCPA violations.
On the other hand, without private right to action, consumers may have no recourse if the AG doesn't wish to pursue action (possibly due to corruption, or lack of resources).
Sounds great! The theory behind capitalism only works if prices are transparent and goods are transferable. These sorts of "special discounts" are fundamentally harmful to the economy as a whole.
> The theory behind capitalism only works if prices are transparent and goods are transferable.
The theory behind capitalism requires people to take into account what they know when making decisions.
Suppose you have a business where many customers expect to be able to try the product before committing to buy it so the cost of paying for shipping for "free returns" has to be incorporated into the advertised price. Then you notice that a subset of customers have a better idea of what they want and never trouble you with returns, so you want to give them a discount to try to get more of their business.
That's capitalism working the way it's supposed to. The customers who consume fewer resources get to pay lower prices. But it's the thing this bill prohibits, isn't it?
If capatilism was working the way it was supposed to, the customer could choose between paying more up front, but having the option of a "free" return, or paying less upfront byt having to pay for a return (or not be able to return it).
And for that matter, the customer would have enough information to know the quality of the product before purchasing, but that is often not possible.
Everybody knows the cows are not actually spheres. It's about how you deal with it.
If you try to sell "return insurance" then some customers don't buy it but end up wanting to return it anyway and then leave you a bad review for not having free returns. That costs you more than charging somewhat higher prices and having free returns, so that's what you do instead. But now efficiency requires some other mechanism of allowing the people who don't do excessive returns to pay a lower price.
Also, suppose you actually did sell return insurance. Then you notice that a subset of the customers who buy return insurance rarely use it, so you want to give them a discount to try to get more of their business.
I can see how say, a roofing business might have a “VIP” sale during a slow season, such that a discounted contract is signed and money is exchanged in the future when the weather doesn’t prohibit the work.
> any small business in the US using dynamic pricing, targeted discounts or "VIP pricing" on their website would be open to suits from Colorado residents
The solution is to use reasonable efforts to block Colorado residents if you can’t comply with the law. That’s a tradeoff a group of people are allowed to make for themselves.
The problem is that a small business in Florida or Massachusetts that does 95% of their business in their own state may have no idea that this Colorado law exists until someone sues them over it.
We don't really want small companies to have to start blocking people in other states by default. That's not great for interstate competition.
The article links to the law. Looks like this is an addition to the existing law about unfair or deceptive trade practices. That allows for a civil penalty of up to $20,000 per person or transaction involved.
> Republican Rep. Chris Richardson, an Elbert County Republican, argued that the bill is too broad and could regulate standard analytic usage in the workplace, such as a human resources software that recommends a pay band for employees based on performance.
He does not think this is is just selling it further? Oh no, it might prohibit software automatically determining my wages, how could we even have a society if we don't let computers figure out the least they can pay me without me quitting.
How do you get from "pay band [...] based on performance" to "least they can pay me without quitting"?
Why would corporate software be incentivized to recommend a pay band any higher than the least the employee would take? The incentives are not aligned
“I absolutely agree that consumers and wage earners should not be exploited by the use of their data,” he said. “But it’s still overly broad and it’s still overly vague in very important parts. And I believe it’s overly simplistic in its definition of wage setting.”
I like the idea, but I'm not sure how enforceable it will be in practice. It seems like it would be relatively difficult to prove a company is using surveillance pricing, and companies may just accept the risk of paying a fine.
If you can do traffic interception, there's a pretty good chance there's going to be traces of price levels in the API and the analytics. Especially since it's probably going to be bolted on to the side of anything PCI compliant. If there isn't, then it's probably going to be really easy to subpoena to prove mens rea, because getting that right is tricky and requires a fair amount of review and coordination.
Subpoenas and whistleblowing are pretty good tools.
It's actually not that hard to prove. For example, PSN now has dynamic pricing for their games which can vary quite wildly and all it takes is a small number of consumers with price differences to prove it. The same is true for grocery stores or whatever else.
Enforcing it is another question though and you're right that companies will likely just accept the fine. It's all the more reason why this sort of thing needs to aggressively be legislated against and denied.
It would be better to just mandate disclosure of the algorithms and data for all prices determined by algorithm.
Sounds like the usual populism. I guess in practice people will route around the insanity.
Going to be interesting to see how this affects Uber prices in Colorado. afaict Uber heavily engages in surveillance pricing but claims otherwise, deferring to 'discount' terminology.
Very good news. Capitalism is going off the rails and needs to be heavily reigned in.
seems incomplete. There's no point in banning anything, if anyone can just do something banned, flout the law, with no consequences.
and -at least in this article- the consequences seem noticeably missing
EDIT: Althought the article does not include it, the bill (linked from the article) does.
It’s right at the top of the linked bill.
The attorney general or a district attorney may bring a civil action on behalf of the state against a person that violates the prohibition against individualized price or wage setting based on surveillance data to seek the imposition of civil penalties. In addition, a person aggrieved by a violation of the prohibition specified in the bill may bring a civil action on behalf of themself or a group of similarly situated persons to restrain further violations and to recover damages, costs, and reasonable attorney fees. A violation of the prohibition against individualized price setting or individualized wage setting is a deceptive trade practice under the "Colorado Consumer Protection Act".
Allowing private right of action means this will be weaponized by attorneys in the same way the ADA has. Just scanning the bill, any small business in the US using dynamic pricing, targeted discounts or "VIP pricing" on their website would be open to suits from Colorado residents. The definitions are extremely broad and there is no safe harbor for small companies either. Damages are also uncapped and apparently Colorado allows treble damages for CCPA violations.
On the other hand, without private right to action, consumers may have no recourse if the AG doesn't wish to pursue action (possibly due to corruption, or lack of resources).
Sounds great! The theory behind capitalism only works if prices are transparent and goods are transferable. These sorts of "special discounts" are fundamentally harmful to the economy as a whole.
> The theory behind capitalism only works if prices are transparent and goods are transferable.
The theory behind capitalism requires people to take into account what they know when making decisions.
Suppose you have a business where many customers expect to be able to try the product before committing to buy it so the cost of paying for shipping for "free returns" has to be incorporated into the advertised price. Then you notice that a subset of customers have a better idea of what they want and never trouble you with returns, so you want to give them a discount to try to get more of their business.
That's capitalism working the way it's supposed to. The customers who consume fewer resources get to pay lower prices. But it's the thing this bill prohibits, isn't it?
If capatilism was working the way it was supposed to, the customer could choose between paying more up front, but having the option of a "free" return, or paying less upfront byt having to pay for a return (or not be able to return it).
And for that matter, the customer would have enough information to know the quality of the product before purchasing, but that is often not possible.
Everybody knows the cows are not actually spheres. It's about how you deal with it.
If you try to sell "return insurance" then some customers don't buy it but end up wanting to return it anyway and then leave you a bad review for not having free returns. That costs you more than charging somewhat higher prices and having free returns, so that's what you do instead. But now efficiency requires some other mechanism of allowing the people who don't do excessive returns to pay a lower price.
Also, suppose you actually did sell return insurance. Then you notice that a subset of the customers who buy return insurance rarely use it, so you want to give them a discount to try to get more of their business.
I can see how say, a roofing business might have a “VIP” sale during a slow season, such that a discounted contract is signed and money is exchanged in the future when the weather doesn’t prohibit the work.
I don’t think that is unreasonable.
Is that a bad thing? If you ate going to discount (B2C), do it for all or do it for none.
> any small business in the US using dynamic pricing, targeted discounts or "VIP pricing" on their website would be open to suits from Colorado residents
The solution is to use reasonable efforts to block Colorado residents if you can’t comply with the law. That’s a tradeoff a group of people are allowed to make for themselves.
The problem is that a small business in Florida or Massachusetts that does 95% of their business in their own state may have no idea that this Colorado law exists until someone sues them over it.
We don't really want small companies to have to start blocking people in other states by default. That's not great for interstate competition.
Ok, but surely there are also downsides.
The article links to the law. Looks like this is an addition to the existing law about unfair or deceptive trade practices. That allows for a civil penalty of up to $20,000 per person or transaction involved.