Rite Aid Faces Facial Recognition Tech Ban Following FTC Allegations

Rite Aid has been prohibited from using facial recognition technology for the next five years, following a settlement with the Federal Trade Commission (FTC). The action comes in response to allegations that Rite Aid’s surveillance system was misused, leading to biased identification of potential shoplifters, particularly targeting Black, Latino, Asian, and female customers.

The FTC’s charges against the drugstore chain include failing to prevent customer harm and not implementing reasonable procedures. Despite disagreeing with these allegations, Rite Aid expressed relief at having reached a resolution. The FTC highlighted that Rite Aid’s technology, employed from October 2012 to July 2020 in hundreds of stores, resulted in numerous incorrect matches. Notably, this included an incident where store employees wrongly detained and searched an 11-year-old girl.

The complaint also pointed out that the facial recognition database was compiled using low-quality images from varied sources like security cameras and employee phones. This system alerted employees via email or phone when someone from the watchlist entered the store, leading to instances where staff followed, confronted, or even called the police on these individuals.

Rite Aid, while respecting the FTC’s inquiry, stated the technology was part of a limited pilot program and had already been discontinued over three years ago. The company is currently undergoing a voluntary Chapter 11 bankruptcy process, during which the agreement with the FTC will need approval from the U.S. Bankruptcy Court. Based in Philadelphia, Rite Aid operates over 2,000 locations but has been financially struggling for years and is also facing legal challenges related to opioid prescriptions.