AI Frontier Institute

A bill for an act prohibiting the use of an automated decision-making system to alter the price of a product or service for a specific individual based on surveillance data, and providing civil penalties.

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Iowa House File 2469 proposes to prohibit businesses from using automated decision-making systems (AI or algorithmic tools operating with little or no human intervention) to alter the price of a product or service for a specific individual based on 'surveillance data,' defined as data obtained through observation, inference, or surveillance related to an individual's characteristics, behaviors, salaries, or biometrics (Section 554J.1). Violations are classified as unfair practices under existing Iowa consumer fraud law (Section 714.16) and the private consumer fraud action statute (Chapter 714H), exposing violators to civil penalties of up to $40,000 per violation, injunctions, disgorgement, and private lawsuits (Section 554J.2). The bill carves out several exemptions under Section 554J.3: pricing differences stemming from actual cost differences; widely available bona fide discounts (e.g., membership, military, student, senior); insurers determining premium amounts; and credit decisions based on consumer reports covered by the federal Fair Credit Reporting Act (15 U.S.C. §1681 et seq.). The attorney general is granted rulemaking authority under Chapter 17A to implement and enforce the chapter (Section 554J.4). Sections 5 and 6 amend existing Sections 714.16 and 714H.3 to incorporate the new prohibition.

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