Rite Aid, a pharmaceutical chain that recently filed for Chapter 11 bankruptcy, faces a new setback. The Federal Trade Commission (FTC) announced a 5-year ban on its use of facial recognition technology for surveillance.

According to the FTC’s complaint, Rite Aid utilized AI-based facial recognition from 2012 to 2020 to identify potential shoplifters and problematic individuals. However, the FTC found that Rite Aid failed to take reasonable measures to avoid harm to consumers.

The False Flagging of Innocent Shoppers

Despite having done nothing wrong, innocent Rite Aid shoppers, particularly women and people of color, were wrongly accused of shoplifting when the store’s facial recognition technology falsely flagged them. Rite Aid did not inform customers about its use of this technology or the collection of their biometric information. Employees were even discouraged from informing visitors about the monitoring policy.

When the facial recognition system flagged a consumer as a previous troublemaker, employees would follow, search, accuse, and even involve law enforcement, leading to public humiliation. Over the years, tens of thousands of images of Rite Aid consumers were amassed from security cameras, employee phones, and media coverage.

The FTC highlighted thousands of incorrect matches, with examples of customers being flagged at locations thousands of miles apart and at numerous stores across the US. As part of the ban, Rite Aid must delete stored videos, photos, and biometric data. Should they reintroduce facial recognition after the ban is lifted, they must inform customers, implement data security measures, and undergo independent assessments.

Topics: Artificial Intelligence, Cybersecurity, Facial Recognition


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