Why Did The FTC Ban Rite Aid From Using AI Facial Recognition?

The digital age has made surveillance much easier. Earlier businesses would rely on guards to be vigilant at all times within their premises, now they use automated cameras that allow security personnel to track and identify security concerns from a central location.

Bring in more sophisticated technology like AI-driven facial recognition and the job becomes easier and more effective. At least, that was the idea behind the adoption of such technologies.

However, which unfortunately didn’t work out too well for Rite Aid, an American drugstore chain, as they’re in hot soup with the US Federal Trade Commission (FTC). What exactly did Rite Aid Do and what’s its outcome? Let’s explore!

What Did Rite Aid Do?

According to the FTC, Rite Aid “used facial recognition technology in its retail stores without taking reasonable steps to address the risks that its deployment of such technology was likely to result in harm to consumers as a result of false-positive facial recognition match alerts.”

Essentially, the company deployed a surveillance program that wasn’t tested properly, had operational deficiencies and posed harm to its customers.

According to a complaint filed in federal court, Rite Aid made use of artificial intelligence-based facial recognition technology from 2012 to 2020 across 200 stores to identify shoplifters or other troublemaking customers.

The complaint further mentioned that the company didn’t take proper measures to prevent harm to consumers as quite a few of them were incorrectly accused by employees because the facial recognition technology falsely flagged them as troublemakers and matched them to previous perpetrators.

It even listed instances of false accusations, including one that generated more than 1,000 match alerts for one photo in the database, which accounted for 5% of all match alerts generated by the company’s system during that period.

Furthermore, 99% of those match alerts came from Los Angeles, with 4 of them listing that person in both New York and California stores in the same 24-hour period. Additionally, the FTC said, “During one five-day period, Rite Aid generated over 900 separate alerts in more than 130 stores from New York to Seattle, all claiming to match one single image in the database.”

Victims of the technology’s false positives were asked to leave the premises, or were searched, at times even publicly called shoplifters and humiliated. One false positive even matched an 11-year-old girl who was then searched.

Ultimately, Rite Aid will be banned from using facial recognition technology for surveillance purposes for 5 years as the company looks to settle the FTC charges.

A proposed order will also require the company to implement comprehensive safeguards and a robust information security program for such technology.

What Did The FTC Say?

In a blog post, the FTC outlined the areas where Rite Aid displayed shortcomings, which included failing to “consider the risks that false positives had on consumers, including risks of misidentification based on race or gender”, “test the system for accuracy”, “enforce image quality controls”, “train its staff” and “monitor, test, or track the accuracy of results”.

Furthermore, the FTC also mentioned that the failures in Rite Aid’s information security program were significant, highlighting that they failed to “properly vet vendors that had access to consumers’ personal information”, “periodically reassess service providers’ data security practices” and “include sufficient information security requirements in contracts with service providers”.

Samuel Levine, Director, Bureau of Consumer Protection, Federal Trade Commission, said, “Rite Aid's reckless use of facial surveillance systems left its customers facing humiliation and other harms, and its order violations put consumers’ sensitive information at risk … Today’s groundbreaking order makes clear that the Commission will be vigilant in protecting the public from unfair biometric surveillance and unfair data security practices.”

TechDogs-"An Image Of Samuel Levine, Director, Bureau Of Consumer Protection, Federal Trade Commission"

Source

What Did Rite Aid Say?

In a statement, Rite Aid said, “We are pleased to reach an agreement with the FTC and put this matter behind us. We respect the FTC’s inquiry and are aligned with the agency’s mission to protect consumer privacy. However, we fundamentally disagree with the facial recognition allegations in the agency’s complaint. The allegations relate to a facial recognition technology pilot program the Company deployed 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 FTC’s investigation regarding the Company’s use of the technology began.”

[Contd.] “Rite Aid’s mission has always been and will continue to be to safely and conveniently serve the communities in which we operate. The safety of our associates and customers is paramount. As part of the agreement with the FTC, we will continue to enhance and formalize the practices and policies of our comprehensive information security program.”

[Contd.] “Looking ahead, we are focused on the important actions underway to strengthen our financial position as we continue providing leading healthcare products and services to the nearly one million customers that we serve daily.”

Source

In October 2023, Rite Aid even filed for Chapter 11 bankruptcy owing to a large debt load, lowered sales and thousands of lawsuits relating to the opioid crisis.

Essentially, its FTC settlement is subject to approval by the US Bankruptcy Court, which is overseeing its ongoing restructuring, as well as the US Federal District Court.

Do you think companies deploying such technology need significant oversight by regulatory bodies? Do AI-based technologies need more scrutiny before they can be deployed in real-life use cases?

Let us know in the comments below!

First published on Thu, Dec 21, 2023

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