The U.S. Federal Trade Commission (FTC) has banned drugstore chain Rite Aid from using facial recognition for surveillance purposes for five years, citing the retailer’s “reckless” use of the technology.
This has resulted in some customers being accused wrongly by Rite Aid’s staff because the technology falsely flagged them as someone who had previously been identified as a shoplifter, according to the complaint.
In addition, the FTC alleged that Rite Aid had failed to disclose to consumers its use of the technology within its stores and discouraged its employees from disclosing this information.
The complaint states that employees acted on false positive alerts and “followed consumers around its stores, searched them, ordered them to leave, called the police to confront or remove consumers, and publicly accused them, sometimes in front of friends or family, of shoplifting.”
The FTC said that Rite Aid’s actions “disproportionately impacted people of color.”
“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,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement.
The company collected “tens of thousands of images of individuals, many of which were low-quality and came from Rite Aid’s security cameras, employee phone cameras, and even news stories,” the complaint said.
Under the FTC’s proposed order, Rite Aid will need to impose comprehensive safeguards to prevent harm to consumers when deploying automated systems that use biometric information to flag them as security risks.
The retailer must cease using such technology if it is unable to control its potential risks to consumers. Rite Aid also will need to implement “a robust information security program” to settle the charges.
Rite Aid Disagrees With Allegations
Rite Aid said the settlement with the FTC is subject to approval by the bankruptcy court overseeing its ongoing restructuring and the U.S. Federal District Court in which the FTC filed its complaint.“However, we fundamentally disagree with the facial recognition allegations in the agency’s complaint,” it added.
Rite Aid asserted that the technology mentioned in the FTC’s allegations was part of a pilot program previously implemented by the company in a limited number of stores.
“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,” it stated.
“Looking ahead, we are focused on the important actions underway to strengthen our financial position as we continue providing leading healthcare products and services to the nearly one million customers that we serve daily,” it stated.
The FTC’s complaint and ban followed a Reuters investigation from 2020 into Rite Aid’s facial recognition program.The investigation found that Rite Aid quietly added facial recognition systems to hundreds of stores in the United States and that in New York and Los Angeles, Rite Aid deployed the technology in largely lower-income, minority neighborhoods.
