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Rite Aid Settles Surveillance Complaint

But pharmacy chain disputes FTC’s depiction of its use of facial-recognition tech.

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Rite Aid filed Chapter 11 bankruptcy in October. PHOTO: JHVEPhoto/iStock.com

Rite Aid Corp. (Philadelphia) misused facial-recognition technology in a way that subjected shoppers to unfair searches and humiliation, the Federal Trade Commission (FTC) has decreed. The settlement that could raise questions about the surveillance technology’s use in stores, airports and other venues nationwide, The Washington Post reported in its coverage of the controversy.

Federal regulators said Rite Aid activated the face-scanning technology, which uses artificial intelligence to attempt to identify people captured by surveillance cameras, in hundreds of stores between 2012 and 2020 in hopes of cracking down on shoplifters and other problematic customers.

But the chain’s “reckless” failure to adopt safeguards, coupled with the technology’s long history of inaccurate matches and racial biases, ultimately led store employees to falsely accuse shoppers of theft, leading to “embarrassment, harassment, and other harm” in front of their family members, co-workers and friends, the FTC said in a statement.

Though agreeing to the settlement, Rite Aid disputed the FTC’s assessment of how much it used the technology in its stores.

“… We respect the FTC’s inquiry and are aligned with the agency’s mission to protect consumer privacy,” the company said in a press release. “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.

The settlement with the FTC is subject to approval by the U.S. Bankruptcy Court overseeing Rite Aid’s ongoing Chapter 11 restructuring and the U.S. Federal District Court in which the FTC filed its complaint, the Post reports.

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Rite Aid currently has just under 2000 pharmacies in the U.S.

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