Quick Summary: Rite Aid banned from using AI facial recognition technology(FRT) for 5 years under a proposed settlement of Federal Trade Commission charges.

FTC’s Allegation: The FTC alleged that Rite Aid failed to implement reasonable procedures and prevent harm to consumers with “reckless” use of facial recognition technology which “disproportionately impacted people of color.”

• The complaint was filed in federal court in Pennsylvania.
• The complaint said that Rite Aid failed to prevent harm to customers when using facial recognition technology from 2012 to 2020 to identify those they suspected of shoplifting or other problematic behavior.
• It alleges Rite Aid’s actions subjected consumers to embarrassment and harassment.
• The commission said Rite Aid’s actions violated a 2010 data security order by failing to adequately oversee its service providers.
• The complaint alleges that Rite Aid used the technology “to capture images of all consumers” in its drugstores and created a database of those identified as carrying out suspicious behavior.
• The database included “accompanying information,” such as names, birth years and details “related to criminal or ‘dishonest’ behavior.'”
• Rite Aid workers would receive “match alerts” to their phones. In numerous instances, the match alerts that led to these actions were false positives.
• The company didn’t inform consumers that it used the technology and “Rite Aid specifically instructed employees not to reveal” its use to customers, the FTC alleges.

Proposed Order Terms: The FTC’s proposed order would require Rite Aid to implement comprehensive safeguards to prevent any future harm to customers.

• It would require Rite Aid to stop using such technology and delete, and direct third parties to remove, any images or photos that have been collected.

Rite Aid’s Comments: “We respect the FTC’s inquiry and are aligned with the agency’s mission to protect consumer privacy”. The company said they had stopped using the technology in a small group of stores more than three years ago before the FTC’s investigation regarding the Company’s use of the technology began.

Example of AI Recognition Tech Misuse: Last year a Black man was jailed in Georgia for nearly a week after a facial recognition system incorrectly matched his face with a suspect in a New Orleans robbery.

Expert Opinion: Dr. Joy Buolamwini, an AI researcher who has studied face-recognitio’s racial biases, told the Washington Post the Rite Aid case was an “urgent reminder” that the U.S. has failed to enact sweeping privacy laws.

Deep Dive: Read this article from Axios for a deeper dive on FRT