Kroger’s Use of Facial Recognition Spurs Price Gouging Concerns

One of America’s largest supermarket chains has provoked political controversy with its use of biometric technology.

Kroger has been using facial recognition technology in combination with its EDGE (Enhanced Display for Grocery Environment) smart shelves and Electronic Shelf Labels (ESLs), which allow for dynamic price adjustments and digital displays. In partnership with Microsoft, Kroger has integrated cameras on these digital displays to collect data on customer demographics—such as age and gender—to personalize advertisements shown on the shelves.

The facial recognition system works by identifying certain characteristics of customers as they shop. Although Kroger has not publicly detailed all of its applications, the technology could potentially provide targeted promotions based on demographic insights.

Lawmakers like Rep. Rashida Tlaib (D-MI) are now voicing concerns over potential discriminatory effects and alleged plans to use the technology for surge pricing. Tlaib, a member of the progressive “Squad,” has been outspoken about what she sees as Kroger’s intention to capitalize on customer data through these technologies.

“Families are struggling to put food on the table,” she stated on X, adding that “facial recognition technology is often discriminatory and shouldn’t be used in grocery stores to price gouge residents.”

The issue dates back to August when Senators Elizabeth Warren (D-MA) and Bob Casey (R-PA) sent a letter to Kroger warning of potential misuse of the technology. They echoed concerns that ESLs, when paired with facial recognition, could allow the company to implement dynamic pricing based on customer profiles. Warren and Casey suggested that such capabilities might lead to situations where Kroger can “quickly update and display the customer’s maximum willingness to pay” on digital price tags, potentially leading to fluctuating prices for essential items.

Kroger, however, has pushed back against these accusations, asserting that its deployment of ESLs and facial recognition is part of a strategy aimed at lowering prices and enhancing the shopping experience.

A spokesperson for Kroger commented, “Kroger’s business model is built on a foundation of lowering prices to attract more customers. Everything we do is designed to support this strategy.” Kroger maintains that the use of ESLs is primarily to reduce waste and streamline price updates, not to implement surge pricing. “To suggest otherwise is not true,” the spokesperson emphasized.

The company also clarified its partnership with Microsoft, noting that while the technology can enable targeted advertisements on its EDGE smart shelves, it does not plan to manipulate prices based on individual customer profiles. Instead, Kroger argues that the dynamic pricing capabilities are meant to reflect real-time conditions, such as supply and demand, to ensure efficiency and better value for customers. However, critics like Tlaib remain skeptical, warning that the potential for abuse is high, particularly when essential goods are involved.

Kroger, which introduced the technology in 2018, now uses it in over 500 stores.

Sources: Daily Dot, Washington Examiner

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October 17, 2024 – by Ali Nassar-Smith