December 23, 2023
David Bruce/Erie Times-News/USA TODAY Network
Rite Aid is one of the biggest pharmacy chains in the United States, but it has been financially struggling. Recently, the company filed for bankruptcy protection.
Nationwide pharmacy Rite Aid has been under fire for its surveillance practices, namely stores' usage of facial recognition technology. This week, the Federal Trade Commission (FTC) banned Rite Aid from using such technology for five years.
Rite Aid, which was founded in Scranton and is headquartered in Philadelphia, has been using AI-based facial recognition from 2012 to 2020, the FTC stated. The measures by Rite Aid were meant to identify potential shoplifters, allowing employees to search and eject suspected customers. But these measures, the FTC said, led to harassment and embarrassment to consumers.
A statement by FTC commissioner Alvaro M. Bedoya detailed some select examples of this conduct from Rite Aid employees. Incidents include an 11-year-old girl searched by an employee after a false match, an alert for a white woman set off by a black customer, and numerous additional incidents of humiliation from wrongful searches.
The FTC found that Rite Aid's actions disproportionally affected people of color, mainly in cities with large populations of people of color including New York and Philadelphia. The company gathered tens of thousands of images, many of them low-resolution pictures from security cameras. According to the FTC, Rite Aid failed to properly test the accuracy of the technology, prevent the use of low-quality images, or train its employees to use the technology.
Under this ban, the FTC is requiring Rite Aid to delete all biometric data that the company has related to the company's surveillance system. Additionally, should Rite Aid return to any such system in the future, it must notify customers when they are added to the system and that they can contest their entry to it. The FTC will also require Rite Aid must conduct substantial tests of the accuracy of its system and the bias it may have against certain demographics.
Rite Aid, while disagreeing with the conclusions made by the investigation, was "pleased to reach an agreement with the FTC." The settlement is still subject to approval by the U.S. Bankruptcy Court, as the company filed for Chapter 11 bankruptcy and has been closing Rite Aid stores around the country, including in Philly.
