• by Sarah Mahoney  @mahoney_sarah, December 22, 2023

Rite Aid and the Federal Trade Commission have come to an agreement about the retailer's “reckless” use of artificial intelligence, which caused it to wrongfully identify people of color and women as shoplifters.

“Biased face surveillance hurts people,”  says FTC Commissioner Alvaro M. Bedoya in a statement. He also cited several examples of the technology’s flaws at Rite Aid, including searching an 11-year-old girl because of a false match, calling the police on “a white lady with blonde hair” when the customer was actually Black, and many others who were “wrongly searched, accused, and expelled from stores.” That humiliation sometimes happened in front of bosses, coworkers, or families.

“We often talk about how surveillance 'violates rights’ and 'invades privacy,’” he says. “We should; it does. What cannot get lost in those conversations is the blunt fact that surveillance can hurt people.”

Reuters initially broke the news about Rite Aid’s flawed technology in 2020 in an investigative report that revealed the company began testing the systems in 200 stores in 2012, in lower-income neighborhoods in New York and Los Angeles.

At that time, Rite Aid said it had already stopped using the technology and shut its cameras off.

In a statement this week, Rite Aid says that while it is pleased to have settled the matter, “we fundamentally disagree with the facial recognition allegations in the agency’s complaint.”

The settlement restricts Rite Aid’s use of any facial recognition technology for five years. It also gives the company just 45 days to delete or destroy “all photos and videos of consumers used or collected in connection with the operation of a Facial Recognition or Analysis System” and prohibits using any data, models, or algorithms derived from such technology. It has 60 days to alert all third parties that received photos or videos.

Other retailers, including Walmart and Home Depot, have also explored using facial recognition software to reduce theft.

Rite Aid’s system “generated thousands of false-positive matches,” the FTC says in its report. “For example, the technology sometimes matched customers with people who had originally been enrolled in the database based on activity thousands of miles away or flagged the same person at dozens of different stores all across the U.S.”