Rite Aid Settles Allegations its Facial Recognition Technology Harmed Consumers

  • The FTC settled with Rite Aid Corporation and an affiliated entity (together, “Rite Aid”) to resolve allegations that the retailer violated the FTC Act by failing to take reasonable measures to prevent harm to consumers when it implemented the use of artificial intelligence-based facial recognition technology in its stores.
  • In its complaint, the FTC alleged that Rite Aid utilized AI technology to identify and flag patrons it had previously deemed likely to engage in shoplifting or other criminal behavior, but that the system was error-prone and generated thousands of false-positive matches. As a result, misidentified consumers were allegedly harmed when Rite Aid employees took measures against them, including banning them from stores, publicly accusing them of past criminal activity, and detaining them or subjecting them to searches. The FTC alleges these harms especially injured Black, Asian, Latino, and women consumers.
  • Under the terms of the settlement, Rite Aid is prohibited from using facial recognition technology in its stores for a period of five years. In addition, it must take action to prevent future harm to consumers, including deleting photos and videos of consumers collected in connection with its facial recognition program, notifying consumers when their biometric information is enrolled in a database, and providing consumers with clear notice about the use of facial recognition technology.