The bankrupt U.S. pharmacy chain Rite Aid will be forbidden from using “face recognition technology for surveillance purposes for five years” as part of a five-year settlement with the U.S. Federal Trade Commission over allegations that it harmed consumers, the FTC said on Tuesday.
From 2012 to 2020, Rite Aid used “AI-based face recognition technology” to identify shoplifters. Still, according to the FTC, the firm incorrectly classified some customers as resembling someone previously recognized as a shoplifter.
According to a statement from Rite Aid, the FTC deal depends on approval from the bankruptcy court that is supervising its insolvency case. “The allegations relate to a facial recognition technology pilot program the company deployed in a limited number of stores,” the company stated in a statement. “Rite Aid stopped using the technology in this small group of stores more than three years ago, before the FTC’s investigation regarding the Company’s use of the technology began.”
The FTC’s complaint and prohibition resulted from a 2020 Reuters investigation into Rite Aid’s facial recognition program.
According to the inquiry, Rite Aid covertly installed face recognition systems in hundreds of locations across the United States, and Rite Aid used the technology in predominantly low-income, non-white districts in the cities of New York and Los Angeles.
