Rite Aid barred from using facial recognition tech after thousands falsely flagged as shoplifters

Bankrupt pharmacy chain Rite Aid was banned from using facial recognition software for five years to settle Federal Trade Commission charges that the technology falsely flagged thousands of customers as potential shoplifters, federal agency said.

Rite Aid, which filed for Chapter 11 bankruptcy protection in October, deployed artificial intelligence-based facial recognition technology from 2012 to 2020.

The company said Tuesday’s agreement with the FTC is subject to approval by the bankruptcy court overseeing its insolvency case.

“The allegations relate to a facial recognition technology pilot program the company deployed in a limited number of stores,” the company said.

“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 FTC filed a complaint against Rite Aid three years ago after a Reuters investigation found that the company was deploying the software in some 200 locations — most of which were in low-income, non-white neighborhoods.