Philadelphia-based Rite Aid has been banned from utilizing facial recognition technology for five years by the United States Federal Trade Commission (FTC). The decision comes in response to allegations that Rite Aid’s surveillance system was improperly employed to identify potential shoplifters, particularly individuals from marginalized communities such as black, Latino, Asian, or female shoppers.
The settlement addresses the lack of customer protection
The FTC’s settlement with Rite Aid addresses charges that the drugstore chain failed to take adequate measures to prevent harm to its customers and implement “reasonable procedures.” Despite Rite Aid’s disagreement with these allegations, the company has expressed satisfaction with agreeing to resolve the issue.
Thousands of incorrect matches and inappropriate actions
According to the federal court complaint filed by the FTC, Rite Aid’s use of facial recognition technology over several years resulted in thousands of incorrect matches. One disturbing incident involved Rite Aid store employees stopping and searching an 11-year-old girl based on a false identification.
Rite Aid employed facial recognition technology in hundreds of its stores from October 2012 to July 2020, to identify shoppers it deemed likely to engage in shoplifting or other criminal activities, according to the FTC.
The complaint highlighted that many of the images used for Rite Aid’s database were of low quality, sourced from security cameras, employee phone cameras, and news stories in some cases. The technology would send alerts to Rite Aid employees via email or phone whenever it identified individuals on its watchlist.
The FTC’s complaint also revealed that store employees would subsequently follow these individuals, order them to leave the store, or even call the police. Shockingly, employees would accuse individuals, sometimes in front of friends, family, and other customers, of having previously committed crimes.
Lack of accuracy testing
One of the FTC’s key criticisms was that Rite Aid failed to adequately test the accuracy of its facial recognition technology before implementing it. Rite Aid has defended itself by asserting that the allegations primarily center on a pilot program used in a limited number of stores, which the company ceased using over three years ago.
Rite Aid released a statement on its website: “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.”
Controversy surrounding facial recognition technology
The use of facial recognition technology has long been a subject of controversy. Proponents argue that it has been instrumental in aiding law enforcement in catching criminals, such as drug dealers, and resolving missing persons cases. However, critics argue that it significantly increases the rate of misidentification, especially for people of color.
Pending approval in US bankruptcy court
Rite Aid emphasized that the US Bankruptcy Court must approve any agreement with the FTC. The company has faced financial struggles for years and recently announced the closure of over 150 stores as part of its voluntary Chapter 11 bankruptcy process. It also confronts financial risks associated with lawsuits related to opioid prescriptions, similar to its larger competitors, CVS and Walgreens.
Rite Aid’s ban on using facial recognition technology for five years marks a significant development in the ongoing debate surrounding such technology. The allegations of improper surveillance practices have led to a comprehensive investigation and a settlement with the FTC. The outcome of this case may have broader implications for using facial recognition technology in the retail industry and beyond.
