Rite Aid Banned From AI Facial Recognition by FTC After Misuse

Rite Aid Corp. must stop using facial recognition for the next five years as part of a privacy settlement with the US Federal Trade Commission, which said the pharmacy chain misused the technology to mistakenly tag consumers as shoplifters.

In a complaint filed in federal court Tuesday, the FTC said Rite Aid used a facial recognition system at stores based in large cities around the US, including New York City, Los Angeles, Baltimore and elsewhere, without notifying customers. The system used low-quality images often taken from security cameras to create a database of alleged shoplifters, and would send alerts to employees when it flagged a match against a customer entering a store, the agency said.

Rite Aid’s facial recognition system generated thousands of improper matches, often involving Blacks, Latinos or women, according to the agency. As a result of the improper matches, Rite Aid employees would follow customers around the store, call the police or sometimes falsely accuse people of shoplifting, the FTC said.

As part of a settlement with the FTC, the chain agreed not to use facial recognition technology for surveillance for the next five years, delete the images it has collected so far and provide annual reports to the FTC on its compliance.

Rite Aid filed for bankruptcy in October and is seeking to sell off the entire chain or big chunks of the company.

Photo: Photographer: Bing Guan/Bloomberg