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Rite Aid is banned from using facial recognition surveillance technology for five years to resolve Federal Trade Commission charges that it failed to protect consumers at hundreds of its stores, the agency said Tuesday.

Rite Aid used an artificial intelligence-based “covert surveillance program” to identify would-be shoplifters between 2012 and 2020, the FTC said in a complaint filed in the United States District Court for the Eastern District of Pennsylvania. Relying on the flawed system, workers at the pharmacy chain wrongly accused customers of wrongdoing in front of friends and family, in some cases searching them, ordering them to leave the store or reporting them to police, according to the complaint.

According to According to the FTC, the retailer hired two companies to help create a database of tens of thousands of images of people Rite Aid believed had committed crimes or intended to do so at one of its locations. Collected from security cameras, employee phone cameras and even news reports, many of the images were poor quality and the system generated thousands of false positives, the FTC alleges.

Preventing misuse of biometric information is a high priority for the FTC, the agency said in its statement.

“Rite Aid's reckless use of facial surveillance systems left its customers facing humiliation and other harm, and violations of its orders put confidential consumer information at risk,” said Samuel Levine, director of the FTC Bureau of Consumer Protection. “Today's groundbreaking order makes clear that the Commission will be vigilant to protect the public from biometric surveillance and unfair data security practices.”

Rite Aid said it was pleased to put the matter behind it, but disputed the allegations in the agency's complaint.

“The allegations relate to a pilot program of facial recognition technology that the company implemented in a limited number of stores. Rite Aid stopped using the technology in this small group of stores more than three years ago, before the investigation by the FTC on the company's use of the technology. began,” said the retailer, which is in bankruptcy court and in the process of restructuring.



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