FTC bans Rite Aid from using AI facial recognition in stores for 5 years

Among the mistakes, an 11-year-old girl was misidentified as a shoplifter and searched

The US Federal Trade Commission (FTC) has banned American drugstore chain Rite Aid from using AI facial recognition technology for surveillance purposes for five years.

The chain deployed the technology for eight years across 200 stores to help identify those who had previously shoplifted from its outlets. If a match was spotted, security staff would confront the potential thief and order them to leave.

But Rite Aid often got it wrong: the FTC claimed, “During one five-day period, Rite Aid generated over 900 separate alerts in more than 130 stores from New York to Seattle, all claiming to match one single image in the database.”

According to the Commission, the retailer "failed to implement reasonable procedures and prevent harm to consumers in its use of facial recognition technology in hundreds of stores."

The company's facial recognition database was built by two companies contracted by Rite Aid and included images depicting tens of thousands of individuals. Many of the images, the FTC alleged, were low quality and came from store security cameras, employee phones, and even news stories.

This resulted in thousands of false positives and let to targets being followed, searched, harassed, removed, and having the cops called on them – sometimes in front of friends and family. The FTC also found actions instigated by facial recognition disproportionately impacted people of color.

"The technology sometimes matched customers with people who had originally been enrolled in the database based on activity thousands of miles away, or flagged the same person at dozens of different stores all across the United States," notes the commission.

Commissioner Alvaro M Bedoya said that among the false positives was an 11-year-old girl who was subsequently searched.

The FTC claims Rite Aid never tested, assessed, measured or documented the accuracy of the technology. The chain also discouraged employees from revealing glitches, and did not train them on the tech.

Rite Aid stopped using the tech after media reports in 2020. The chain spun that decision as being made "in part based on a larger industry conversation."

The FTC has ordered Rite Aid to undertake a list of measures, including deleting any images or photos collected for the facial recognition system, as well as algorithms or related products; notify consumers; respond to related consumer complaints in writing, and provide clear notice to shoppers of any biometric surveillance technology in stores; delete any biometric data it collects within five years; implement a data security program; obtain independent third-party assessments and provide the commission with an annual certification from its CEO of its adherence.

Rite Aid said in a statement:

We are pleased to reach an agreement with the FTC and put this matter behind us. We respect the FTC's inquiry and are aligned with the agency's mission to protect consumer privacy. However, we fundamentally disagree with the facial recognition allegations in the agency's complaint. The allegations relate to a facial recognition technology pilot program the Company deployed 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.

Rite Aid's mission has always been and will continue to be to safely and conveniently serve the communities in which we operate. The safety of our associates and customers is paramount. As part of the agreement with the FTC, we will continue to enhance and formalize the practices and policies of our comprehensive information security program.

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."

In October 2023, the company filed for Chapter 11 bankruptcy thanks to a large debt load, slumping sales, and thousands of lawsuits alleging involvement in the opioid crisis. ®

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