The FTC recommended that Rite Aid be prohibited from utilizing facial recognition technology in its establishments for a period of five years. It had been using the software in the majority of its retail pharmacies around several states, many of which were located in mainly minority neighborhoods, and allegedly incorrectly identified people as stealing. While Rite Aid expressed satisfaction over the agreement made with the FTC, it disputed the claims in the agency's statement.
The Federal Trade Commission (FTC) has proposed to prohibit Rite Aid from using facial recognition software in its pharmacies for five years, in order to settle accusations of the company's improper use of the technology to identify shoplifters. The FTC claims that between 2012 and 2020, the store deployed facial recognition technology across hundreds of its retail pharmacies in multiple states, resulting in many false-positive matches. Individuals so identified were stopped, searched, accused of criminal activity, reported to the police, and in some cases even banned from Rite Aid stores. The FTC also alleges that the facial recognition system generated more false positives in majority Black and Asian neighborhoods than in majority white areas, where 80% of Rite Aid's stores are located. It is claimed that the drugstore chain used face technology from two unnamed vendors, and maintained a database of persons of interest containing images and other data collected from security camera footage, driver's licenses or government IDs.
As part of the proposed settlement, Rite Aid has been asked to order third parties to delete all images or photos collected by its facial recognition system, inform shoppers when collecting biometric data in connection with its security or surveillance systems, and permanently discontinue using the technology if it cannot control potential risks to consumers. The company has stated that it is happy to reach an agreement with the FTC but does not accept its allegations. It also pointed out that the pilot program was used in a limited number of stores and stopped more than three years ago.
The FTC's actions come after a Reuters investigation in 2020 which highlighted the use of face recognition technology by Rite Aid in mainly lower-income, non-white neighborhoods. The Reuters investigation found that FaceFirst's technology was liable to misidentify Black people as shoplifters. Civil rights and privacy advocates contend that the use of facial recognition software has caused increased surveillance, and research has revealed that the AI underpinning the technology is more apt to misrecognise people of colour, leading to wrongful arrests.
This proposed settlement is pending approval by a court in the bankruptcy proceedings of Rite Aid. The drugstore chain declared Chapter 11 bankruptcy in October due to decreased sales, escalating debt, and litigation alleging its contribution to the US opioid crisis.
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