FTC bars Rite Aid from using AI for 5 years for ‘reckless’ surveillance

Rite Aid, the pharmacy chain that filed for bankruptcy in October, is now facing another issue. It has been banned for five years from using artificial intelligence facial recognition technology for surveillance purposes to settle charges by the Federal Trade Commission.

However, we fundamentally disagree with the facial recognition allegations in the agency’s complaint.

Rite Aid

In a statement on Tuesday, Dec. 19, the FTC said the retailer failed to implement “reasonable procedures and prevent harm to consumers” using facial recognition in hundreds of its stores.

“Rite Aid’s reckless use of facial surveillance systems left its customers facing humiliation and other harms, and its order violations put consumers’ sensitive information at risk,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.“Today’s groundbreaking order makes clear that the Commission will be vigilant in protecting the public from unfair biometric surveillance and unfair data security practices.”

Rite Aid banned from using AI facial recognition after FTC says retailer deployed technology without reasonable safeguards: https://t.co/5ZZdle36zN

— FTC (@FTC) December 19, 2023

In its complaint, the FTC said between 2012 and 2020, Rite Aid used AI to capture images of all its customers at select stores and created a database of “persons of interest” suspected of past wrongdoings like shoplifting. The system would send match alerts to Rite Aid workers, who were then instructed to tell the customers to leave the store. The FTC said this led to numerous false positives.

The FTC said Rite Aid did not inform its customers of the technology being used in its stores and instructed employees not to reveal anything to consumers or the media. In a statement, Rite Aid said it had stopped using the technology in a small group of stores more than three years ago.

“We are pleased to reach an agreement with the FTC and put this matter behind us. We respect the FTC’s inquiry and are aligned with the agency’s mission to protect consumer privacy,” Rite Aid said. “However, we fundamentally disagree with the facial recognition allegations in the agency’s complaint.”