Rite Aid Corp. has been prohibited from employing facial-recognition technology driven by artificial intelligence (AI) to combat shoplifting after federal regulators discovered that it unfairly targeted a significant number of women and individuals of color.
Settlement with the Federal Trade Commission
Under a settlement with the Federal Trade Commission (FTC), the pharmacy chain has agreed to refrain from using the AI-powered technology, which aimed to identify individuals it believed had previously committed theft in its stores, for the next five years.
Program Errors and False Accusations
Court filings reveal that Rite Aid was accused of implementing the technology in hundreds of its stores between 2012 and 2020. However, the FTC found that the program consistently made mistakes, incorrectly associating unrelated individuals with prior shoplifting cases and leading to wrongful accusations against innocent shoppers.
Disproportionate Impact
The errors primarily affected women and people of color, according to the FTC lawsuit.
Violation of Consumer Privacy Protections
Furthermore, Rite Aid was found to have shared customer data with third-party companies involved in the development of the security system, resulting in a breach of consumer privacy protections.
Rite Aid Faces Repercussions for Facial Surveillance Misuse
Rite Aid, the popular drugstore chain, has come under fire for its irresponsible use of facial surveillance systems, resulting in humiliation and other adverse effects for its customers. The Federal Trade Commission’s (FTC) bureau of consumer protection weighed in on the matter, expressing concern for the potential risks to consumers’ sensitive information.
As part of a settlement, Rite Aid has agreed to take immediate action by deleting all biometric data it had collected from its customers. This move aims to address the privacy violations highlighted by the FTC.
In response to the allegations, Rite Aid has acknowledged the FTC’s findings but expressed disagreement with the claims surrounding the functionality of its facial recognition systems. The company clarified that these accusations originated from a past pilot program that was discontinued years ago.
“The allegations in question relate solely to a limited pilot program involving facial recognition technology that was implemented in a select number of our stores. Rite Aid ceased using this technology in this specific group of stores over three years prior to the commencement of the FTC’s investigation,” the company stated in an official press release.
It is worth noting that Rite Aid has already filed for Chapter 11 bankruptcy protection back in October. Consequently, the agreement with the FTC will necessitate the approval of the bankruptcy court before its implementation.
The FTC’s Increased Scrutiny of Biometric Information for Security
The Federal Trade Commission (FTC) recently announced its commitment to intensify its oversight of the use of biometric information for security purposes. This move comes as part of the FTC’s ongoing efforts to protect consumers’ privacy and ensure that businesses handle sensitive data in a responsible manner.
In light of these concerns, the FTC has recognized the need for closer monitoring and regulation of the use of biometric information. By doing so, the FTC aims to strike a delicate balance between facilitating innovation and safeguarding consumers’ privacy rights.
It is worth noting that the FTC’s enhanced scrutiny does not aim to stifle the adoption and development of biometric technologies. Instead, its primary objective is to ensure that businesses employing such technologies implement robust security measures, obtain informed consent, and provide transparent disclosures regarding data collection and usage.
By taking a proactive approach, the FTC aims to promote responsible practices within the industry and encourage businesses to prioritize privacy protection. Furthermore, this increased scrutiny serves as a reminder to both consumers and businesses alike of the importance of understanding and addressing the potential risks associated with biometric information use.
In conclusion, the FTC’s recent announcement signals a heightened focus on monitoring the use of biometric information for security purposes. As technology continues to advance, it is crucial for regulatory bodies like the FTC to stay vigilant and adapt their strategies accordingly, ultimately ensuring that consumers’ privacy remains protected in the face of evolving threats.
