Rite Aid Prohibited From Using Facial Recognition Technology For Five Years

(RTTNews) - Rite Aid Corporation (RADCQ) announced on Tuesday that the U.S. Federal Trade Commission (FTC) has prohibited it from using facial recognition technology for five years. The FTC cited false shoplifting accusations targeting women and people of color through Rite Aid's facial surveillance system.

The FTC stated that Rite Aid's facial surveillance system inaccurately accused customers of shoplifting, leading to humiliation, and harassment, and also put customer's sensitive information at risk.

Between 2012 and 2020, complaints filed in the FTC court revealed that Rite Aid's facial surveillance technology failed to identify actual shoplifters or individuals engaging in problematic behavior. Instead, it mistakenly flagged innocent customers as someone who had been previously identified as shoplifters or troublemakers.

Moreover, Rite Aid had contracted with two companies to create a database of potential shoplifters or troublemakers, using low-quality images from security cameras, employee phone cameras, and news stories.

Acting on this false information, employees of the stores used to follow customers, search them or order them to leave, call the police to confront customers, and publicly accuse them of shoplifting.

FTC's order requires Rite Aid to stop using such technology in future if it continues to pose a risk to customers. Also, it ordered Rite Aid to settle charges of a 2010 Commission data security order violation.

Rite Aid is currently facing bankruptcy charges, so FTC's order will come into effect after getting approval from the U.S. Bankruptcy Court and U.S. Federal District Court.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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