Retail Chain Settles FTC Charges for Misuse of Facial Recognition Technology

The Federal Trade Commission (FTC) reached a settlement with Rite Aid, prohibiting the company from using facial recognition surveillance technology for five years. The FTC accused Rite Aid of improperly identifying customers as potential shoplifters through a clandestine AI-based surveillance program from 2012 to 2020. This led to wrongful accusations, embarrassment, and other harms to the affected consumers. Rite Aid had compiled a database of thousands of images, sourced from security cameras, employee phones, and news stories, to identify individuals believed to have committed or intended to commit crimes at their stores. However, the FTC alleged that this system generated numerous false positives due to poor image quality. The FTC highlighted the importance of preventing biometric information misuse and unfair data security practices. Rite Aid, currently undergoing bankruptcy restructuring, expressed relief at concluding the matter but contested the allegations. The retailer clarified that the facial recognition technology had been discontinued in a limited number of stores over three years before the FTC's investigation commenced. The agreement seeks to address the privacy and security concerns arising from Rite Aid's past use of facial surveillance systems.