FTC Bans Rite Aid from Using Facial Recognition Technology

The Federal Trade Commission (FTC) has taken action against Rite Aid for its misuse of facial recognition technology in its stores. The pharmacy chain is now prohibited from using this technology for surveillance purposes for five years. This decision comes after the FTC charged Rite Aid with failing to implement reasonable procedures to prevent harm to consumers through its use of such technology.

From 2012 to 2020, Rite Aid used artificial intelligence-based facial recognition to identify potential shoplifters or other problematic customers. However, the FTC found that the technology was poorly managed, leading to false accusations against innocent consumers. These errors were particularly prevalent in stores located in communities with a high population of Black and Asian residents, revealing a racial bias in the technology’s application. Consumers were often unaware that the technology was in use, as employees were discouraged from disclosing this information.

The FTC’s complaint highlights several failures by Rite Aid, including the lack of proper testing and monitoring of the technology’s accuracy, inadequate training for employees, and the use of low-quality images that increased the likelihood of false positives. Furthermore, Rite Aid is accused of violating a 2010 data security order by not properly overseeing its service providers and ensuring they had adequate safeguards for consumer data.

Under the proposed order, Rite Aid must implement comprehensive safeguards when using any automated systems that involve biometric information. The order also mandates that Rite Aid discontinue the use of such technology if it cannot manage potential consumer risks effectively. Additionally, the company is required to establish a robust information security program, overseen by top executives, and comply with several other provisions, including deleting collected images and notifying consumers about the enrollment of their biometric data.

“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 the Director of the FTC’s Bureau of Consumer Protection, Samuel Levine. “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.”

Source: FTC

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December 20, 2023 – by the FindBiometrics Editorial Team