When you listen to music through the bi-packed earphones, the sound pressure on your ears is estimated¹ based on the electrical characteristics of the player and earphones. Then, the estimate is compared against the reference levels² of sound pressure. As a result, icons of different colors can be displayed to indicate status of sound pressure and the levels of risks to hearing damage.
¹The methodology is based on European norm (50332-1/2).
²The reference levels come from the minimum requirement for health and safety that the European directive 2003/10/EC provides for the noises exposed to individuals.