The Federal Trade Commission (FTC) has ruled against pharmacy chain Rite Aid, denying them the right to use facial recognition systems in their stores for five years. The FTC found numerous flaws in Rite Aid’s surveillance program, concluding that the company had failed to implement reasonable procedures to prevent harm to consumers. Rite Aid had used artificial intelligence-based facial recognition technology to identify customers engaging in shoplifting or other problematic behavior. The company failed to inform consumers about the use of this technology and deployed a flawed system that falsely flagged numerous customers. The FTC also found that the system disproportionately impacted people of color. This ruling highlights the need for consumer privacy and data security in the use of facial recognition technology.
| Signal | Change | 10y horizon | Driving force |
|---|---|---|---|
| Rite Aid denied the right to run facial recognition systems in its stores | Limiting the use of facial recognition technology in retail stores | Retail stores may have stricter regulations or bans on the use of facial recognition technology. Consumers may have more control over the use of their biometric information. | Concerns over privacy and consumer protection |
| FTC warns about the use of biometric information and related technologies | Increased awareness and regulation of biometric data privacy and security | Stricter regulations and safeguards for the use of biometric information. Increased transparency and control for consumers. | Addressing privacy and data security concerns |
| Rite Aid deployed flawed facial recognition program with potential for bias and discrimination | Recognition of the problems and risks associated with facial recognition technology | Improved accuracy and safeguards in facial recognition technology. Stricter regulations on deployment and use to prevent bias and discrimination. | Lack of proper implementation and oversight |
| Rite Aid mistakenly flagged customers, disproportionately impacting people of color | More accurate and fair facial recognition systems | Facial recognition systems that are less prone to false positives and unbiased towards specific demographics. Improved training and monitoring for employees. | Lack of accuracy and training in the technology |
| Rite Aid violated data security order in the past | Increased scrutiny and consequences for data breaches | Enhanced data security measures and stricter enforcement of data protection regulations. Companies held accountable for safeguarding customer information. | Previous history of data security violations |
| Tech giants backing away from facial recognition technology | Decreased use and development of facial recognition technology | Reduced deployment of facial recognition technology in various industries. Greater focus on privacy and ethical considerations. | Privacy concerns and ethical considerations |
| Awareness of the need for informed consent in using facial recognition technology | Increased transparency and user control over biometric data | Consumers having the right to be informed and choose whether to participate in facial recognition technology. | Empowering individuals in privacy decisions |