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The Federal Trade Commission (FTC) this week said that drug chain Rite Aid would have to agree to not use "facial recognition technology for surveillance purposes for five years," if it wants to resolve FTC charges "that the retailer failed to implement reasonable procedures and prevent harm to consumers in its use of facial recognition technology in hundreds of stores."

The retailer is charged with failing to "take reasonable measures to prevent harm to consumers, who, as a result, were erroneously accused by employees of wrongdoing because facial recognition technology falsely flagged the consumers as matching someone who had previously been identified as a shoplifter or other troublemaker."  Specifically women and people of color were identified as potential shoplifters by the technology that Rite Aid would be prohibited from using, with thousands of false-positive cases.

Rite Aid also would be required to "delete, and direct third parties to delete, any images or photos they collected because of Rite Aid’s facial recognition system as well as any algorithms or other products that were developed using those images and photos … Notify consumers when their biometric information is enrolled in a database used in connection with a biometric security or surveillance system and when Rite Aid takes some kind of action against them based on an output generated by such a system … Investigate and respond in writing to consumer complaints about actions taken against consumers related to an automated biometric security or surveillance system … Provide clear and conspicuous notice to consumers about the use of facial recognition or other biometric surveillance technology in its stores… (and) Delete any biometric information it collects within five years."

Axios writes that "while Rite Aid welcomed the proposed settlement, it said in a statement Tuesday 'we fundamentally disagree with the facial recognition allegations in the agency's complaint,' adding that the company used the technology in 'a limited number of stores'."

KC's View:

This is the kind of stuff that every retailer is going to have to be cautious about - technology can help companies address a lot of problems, but there are limits to what algorythims can do.  By just assigning these tasks to technology, without the leavening influence of human beings and common sense, companies could put themselves at risk.  These risks are both financial and reputational, and so retailers have to be cautious in certain kinds of technology implementations.