Rite Aid, the beleaguered drugstore chain, has agreed to a five-year ban on employing facial recognition technology following allegations that its surveillance system misidentified potential shoplifters, particularly targeting Black, Latino, Asian, or female shoppers. The settlement with the Federal Trade Commission (FTC) is in response to charges that Rite Aid failed to take adequate measures to prevent harm to its customers and neglected to implement “reasonable procedures.”
While Rite Aid expressed disagreement with the allegations, it acknowledged the resolution reached with the FTC. The federal court complaint filed by the FTC claimed that Rite Aid’s use of facial recognition technology over several years resulted in thousands of erroneous matches, including an incident involving the unwarranted search of an 11-year-old girl by store employees.
Operating in hundreds of stores from October 2012 to July 2020, Rite Aid employed facial recognition technology to identify shoppers previously labeled as likely to engage in criminal behavior, without informing customers of its use. The technology was installed in various cities, including New York City, Baltimore, Philadelphia, Los Angeles, and San Francisco, with cameras targeting customers upon entry or as they moved through the store.
The complaint highlighted that the images in Rite Aid’s database were often of low quality, sourced from security cameras, employee phone cameras, and news stories. The technology, which compared live images with this database, would send alerts to Rite Aid employees when individuals on the watchlist entered the store. Subsequently, employees would follow, order them to leave, or contact the police.
The FTC asserted that Rite Aid failed to conduct accuracy tests on its technology before implementation. Rite Aid countered, stating that the allegations centered on a pilot program used in a limited number of stores, discontinued over three years ago.
In response, Rite Aid emphasized its respect for the FTC’s inquiry and alignment with consumer privacy protection. However, it fundamentally disagreed with the facial recognition allegations. Notably, any agreement reached will require approval in U.S. Bankruptcy Court.
Rite Aid, headquartered in Philadelphia, recently announced the closure of over 150 stores as part of a voluntary Chapter 11 bankruptcy process. The company, facing financial challenges for years, also grapples with financial risks stemming from lawsuits related to opioid prescriptions, akin to its larger counterparts, CVS and Walgreens.
