The U.S. drugstore giant, Rite Aid, is now banned from employing facial recognition software for five years, following a ruling by the Federal Trade Commission (FTC). The FTC found Rite Aid’s use of facial surveillance systems to be reckless, leading to humiliation and data security risks for its customers.
FTC’s Order and Approval Process
The FTC’s order, while issued, awaits approval from the U.S. Bankruptcy Court, as Rite Aid filed for Chapter 11 bankruptcy protection in October. The order mandates that Rite Aid delete all images collected through its facial recognition system and any products created from those images. Furthermore, the company must establish a robust data security program to protect personal data collected in the future.
Rite Aid’s Secret Deployment of Facial Recognition
In 2020, a Reuters report unveiled Rite Aid’s covert implementation of facial recognition systems across approximately 200 U.S. stores over an eight-year span starting in 2012. Notably, these systems were tested in largely lower-income, non-white neighborhoods.
FTC’s Focus on Biometric Surveillance Misuse
The FTC has been increasingly vigilant regarding the misuse of biometric surveillance, with Rite Aid becoming a prominent target. Among the allegations are that Rite Aid, in collaboration with two contracted companies, created a “watchlist database” containing images of customers suspected of criminal activity in their stores. These images were typically of poor quality and captured from various sources, including CCTV and employees’ mobile phones.
False Positives and Customer Accusations
When a customer entered a Rite Aid store and their image matched an entry in the database, employees received automatic alerts instructing them to take action, often leading to “approach and identify” directives. Unfortunately, these matches frequently produced false positives, resulting in improper accusations of wrongdoing against innocent customers. This caused embarrassment, harassment, and other harm.
Lack of Transparency and Customer Awareness
The FTC also highlighted Rite Aid’s failure to inform customers about the use of facial recognition technology in its stores. Moreover, employees were explicitly instructed not to disclose this information to customers, exacerbating the lack of transparency.
Implications of the Ban on Rite Aid
The ban on Rite Aid’s use of facial recognition technology underscores the importance of responsible and ethical deployment of biometric surveillance systems. The FTC’s action serves as a warning to companies that recklessly employ such technology, highlighting the potential consequences of violating customer privacy and trust. The approval of the order by the U.S. Bankruptcy Court will mark a significant step in holding companies accountable for their actions in the era of biometric surveillance.
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