FTC imposes five-year ban on Rite Aid’s use of facial recognition technology

Rite Aid will be unable to use facial recognition security for the next five years as part of a settlement with the Federal Trade Commission. The FTC accused the drugstore chain of “reckless use of facial surveillance systems.” Rite Aid’s use of an AI-powered facial recognition technology from 2012 to 2020 to identify potential shoplifters and problematic customers was the subject of the complaint. The company created a database with “tens of thousands” of customer images, including names, dates of birth, and alleged crimes. The photos were of poor quality and often generated false-positive alerts. The FTC noted that the technology and “Rite Aid’s failures were likely to cause substantial injury to consumers, especially to Black, Asian, Latino and women customers.”

The settlement also requires Rite Aid to delete the collected photos and implement a proper data security program. The company is currently going through bankruptcy proceedings and the proposed order will take effect after being approved by the bankruptcy court. Rite Aid disagreed with the allegations, stating that it stopped using the surveillance technology years ago. The company said it is pleased to reach an agreement with the FTC and will continue to prioritize customer and associate safety.