FTC Calls Out Rite Aid For Being Reckless With AI Facial Recognition, Issues Ban

The United States Federal Trade Commission is dropping the ban hammer on Rite Aid after finding the company’s use of AI facial recognition technology, which was used in hundreds of its stores, was harmful to consumers. The retailer will not be able to use this technology for five years while it settles the charges brought forth by the FTC.

The agency minced no words when making the announcement. Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, states that “Rite Aid's reckless use of facial surveillance systems left its customers facing humiliation and other harms, and its order violations put consumers’ sensitive information at risk.”

According to the FTC these measures are necessary because the “company failed 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.”


The FTC is mandating that Rite Aid implement several safeguards before it can begin using AI facial recognition technology in its stores again. Not only that, but the company is also being required to comply with a prior order from 2010 that states it must develop an information security program that will be overseen by top executives.

With this decision the FTC is sending a message that poorly implemented AI facial recognition that harms the American public will not be tolerated. The detail the announcement goes into regarding the way customers were harmed show just how bad a job some companies are doing when it comes to working with AI, and it’s good the agency seems to want to get out ahead of the problem.