FTC Settlement: Rite Aid Restriction on Facial Recognition Technology
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The U.S. Federal Trade Commission (FTC) has reached a settlement with the bankrupt pharmacy chain Rite Aid, prohibiting the company from employing facial recognition technology for surveillance purposes over the next five years. The FTC charged with harming consumers by utilizing artificial intelligence-based facial recognition technology from 2012 to 2020 to identify potential shoplifters. However, the company inaccurately identified some individuals as matching previous shoplifting profiles.
Agreement Pending Bankruptcy Court Approval
In response to the allegations, Rite Aid stated that the agreement with the FTC is contingent upon approval by the bankruptcy court overseeing its insolvency case. The pharmacy chain clarified that the accusations pertain to a facial recognition technology pilot program implemented in a limited number of stores. Rite Aid ceased the use of this technology in the specified stores more than three years ago, well before the initiation of the FTC’s investigation.
The FTC’s complaint and subsequent ban stem from a 2020 Reuters investigation into facial recognition program. The investigation revealed discreetly introduced facial recognition systems into hundreds of its stores across the United States, with a focus on lower-income, non-white neighborhoods in New York and Los Angeles. Following the disclosure of these findings to Rite Aid in July 2020, the company announced the discontinuation of its facial recognition software.
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