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

Rite Aid facial recognition ban overview: 

• Who: The Federal Trade Commission banned drugstore chain Rite Aid from being able to use AI facial recognition technology for surveillance purposes for the next 5 years. 
• Why: The ban ends FTC claims that Rite Aid used AI facial recognition technology to falsely tag consumers as shoplifters, with the technology allegedly disproportionately targeting women and people of color. 
• Where: The ban is in place for Rite Aid locations nationwide.

The Federal Trade Commission banned Rite Aid from using AI facial recognition technology for surveillance purposes for five years earlier this month to resolve claims the drugstore chain used the technology to falsely tag consumers as shoplifters. 

The agency argued Rite Aid also disproportionately targeted women and people of color while using its AI facial recognition technology to tag consumers as shoplifters from the years 2012 to 2020. 

Rite Aid, which has been ordered to implement “comprehensive safeguards” going forward, was ultimately accused by the FTC of failing to implement reasonable procedures that would prevent consumers from being harmed by the company’s AI facial recognition technology. 

“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. 

Rite Aid must stop using automated tech if it cannot control potential consumer risks, FTC says

Per the FTC’s proposed order, Rite Aid will be required to discontinue its use of any automated technology if it finds it cannot control potential risks it presents to consumers and implement a “robust” information security program overseen by its top executives. 

The security program will resolve claims Rite Aid violated a data security order presented by the commission in 2010 by allegedly failing to “adequately oversee” its service providers, according to the FTC. 

Rite Aid contracted with a pair of companies to make a database of tens of thousands of images of consumers they believed engaged or attempted to engage in criminal acts, according to the FTC, which argued the system “generated thousands of false-positive matches.”

The FTC has also ordered Rite Aid to notify consumers when their biometric info is enrolled in connection with a biometric security or surveillance system and delete and direct third parties to delete images or photos collected using its AI facial recognition system, among other things. 

“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,” Levine said. 

Rite Aid filed for Chapter 11 bankruptcy in October, saying at that time it would be funding a restructuring that will include closing retail locations and a $3.45 billion bankruptcy loan. 

Have you been unfairly targeted by Rite Aid’s AI facial recognition technology? Let us know in the comments.

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