Rite Aid has 5-year ban on facial recognition tech under FTC settlement

Rite Aid Corp. will be prohibited from using facial recognition technology for surveillance purposes for five years to settle Federal Trade Commission charges the retailer did not implement “reasonable” procedures and prevent consumer harm in using the technology in hundreds of stores, the agency said Tuesday.

The Philadelphia-based company said in a statement the FTC’s facial recognition allegations stem from a discontinued pilot program.

According to the FTC’s complaint, Rite Aid employees’ action against individuals who had triggered supposed matches with facial technology included subjecting them to increasing surveillance; banning them from entering the store, accusing them in front of others of past criminal activity; subjecting them to searches; and calling the police to report they had engaged in criminal activity.

The complaint said that in numerous instances, alerts were “false positives,” and that its failures caused substantial injury, particularly to Black, Asian, Latino and women consumers.

The complaint was filed in U.S. District Court in Philadelphia.

Rite Aid said in its statement that while it is pleased to put the matter behind it, “we fundamentally disagree with the facial recognition allegations in the agency’s complaint.

“The allegations relate to a facial recognition technology pilot program the Company deployed in a limited number of stores. Rite Aid stopped using the technology in this small group of stores more than three years ago, before the FTC’s investigation regarding the Company’s use of the technology began.”

Experts warn that artificial intelligence can be a valuable tool for employers in functions such as hiring, but also poses significant risks of inadvertent discrimination.