Rite Aid Faces Ban From Using Facial Recognition Technology for Five Years
One of the biggest pharmacy chains in the U.S., Rite Aid, is banned from using facial recognition software for the next five years as a result of the Federal Trade Commission’s (FTC) investigation. According to the FTC, Rite Aid’s reckless use of facial surveillance systems has caused humiliation and put sensitive information of its customers at risk.
The order, which is still pending approval from the U.S. Bankruptcy Court as Rite Aid filed for Chapter 11 bankruptcy protection in October, mandates the company to delete any images collected as part of its facial recognition system rollout. In addition, Rite Aid is required to implement a robust data security program to safeguard any personal data it collects.
A report from 2020 revealed that Rite Aid had secretly introduced facial recognition systems across approximately 200 U.S. stores over an eight-year period, starting in 2012, particularly targeting lower-income, non-white neighborhoods.
Rite Aid partnered with two contracted companies to create a “watchlist database” containing images of customers supposedly engaged in criminal activity at its stores. Often, these images, captured from CCTV or employees’ mobile phone cameras, were of poor quality, which led to false positive matches. As a result, employees incorrectly accused customers of wrongdoing, leading to embarrassment, harassment, and other harm.
The use of facial recognition technology without informing customers and failing to test or measure the accuracy of the system raised concerns about inherent biases in AI systems. The FTC pointed out that Rite Aid’s technology was more likely to generate false positives in stores located in plurality-Black and Asian communities than in plurality-White communities.
In response to the FTC’s allegations, Rite Aid stated that it was “pleased to reach an agreement with the FTC,” although it disagreed with the core of the allegations. The company claimed that it stopped using the technology in a limited number of stores more than three years ago, before the FTC’s investigation began. However, the ban will remain in place for the next five years.
This move by the FTC highlights the increasing scrutiny and regulation of facial recognition technology, as cities and politicians have imposed bans and regulations to address the potential misuse and inherent biases of the technology. The case of Rite Aid also highlights the importance of proper testing, accuracy, and transparency when deploying AI-powered surveillance systems.
