FTC bans Rite Aid’s ‘reckless’ use of facial recognition tech

20 Dec 2023

Image: © JHVEPhoto/Stock.adobe.com

The FTC said Rite Aid’s use of facial recognition tech led to numerous customers being falsely identified and discriminated against by employees.

Bankrupt pharmacy chain Rite Aid has been banned from using facial recognition technology in its stores for five years, according to the US Federal Trade Commission (FTC).

The FTC said Rite Aid used this technology in hundreds of its stores between 2012 and 2020 to identify shoppers that the company had deemed “likely to engage in shoplifting or other criminal behaviour”. This measure was done to keep those individuals out of Rite Aid stores, according to the FTC.

The technology sent alerts to Rite Aid employees to let them know if an individual who entered a store was a match for an entry in “Rite Aid’s watchlist database”. Employees would react to these alerts in various ways, including detaining individuals, publicly accusing them of past criminal activity, banning them from entering the store and calling the police, the FTC claimed.

The FTC said this led to numerous instances of “false positives”, in which the facial recognition technology incorrectly identified an individual as being someone in the Rite Aid database. The organisation said Rite Aid failed to implement reasonable procedures and prevent harm to consumers with its use of this technology.

“Rite Aid’s reckless use of facial surveillance systems left its customers facing humiliation and other harms, and its order violations put consumers’ sensitive information at risk,” said Samuel Levine, director of the FTC’s bureau of consumer protection.

“Today’s groundbreaking order makes clear that the commission will be vigilant in protecting the public from unfair biometric surveillance and unfair data security practices.”

Along with the five-year ban, the FTC’s proposed order will require Rite Aid to implement “comprehensive safeguards” to prevent this technology from causing similar harms to consumers, such as improved testing and only using high-quality images to decrease the risk of false positives.

Other provisions of the proposed order will require the company improve its data security practices, such as by deleting biometric information after five years and ensuring Rite Aid and third parties delete images collected from any future facial recognition databases.

Rite Aid said it was pleased to reach an agreement with the FTC but that it fundamentally disagreed with the facial recognition allegations in the FTC complaint.

“The allegations relate to a facial recognition technology pilot program the company deployed in a limited number of stores,” Rite Aid said. “Rite Aid stopped using the technology in this small group of stores more than three years ago, before the FTC’s investigation regarding the company’s use of the technology began.”

The FTC complaint claims this technology was used in hundreds of stores. Rite Aid has roughly 2,500 stores in 19 US states, according to its website.

As Rite Aid is currently going through bankruptcy proceedings, the FTC said the order will go into effect after approval from the bankruptcy court and the federal district court.

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Leigh Mc Gowran is a journalist with Silicon Republic