The Federal Trade Commission (FTC) has prohibited pharmacy chain Rite Aid from using facial recognition technology for five years.
This comes after an FTC investigation found that Rite Aid deployed facial recognition systems in about 200 stores without putting adequate consumer privacy safeguards in place.
In a statement, Rite Aid said that while it shares the goal of protecting privacy, it disagrees with some of the FTC’s allegations.
Samual Levine, Director of the FTC’s Bureau of Consumer Protection said, “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.”
Rite Aid claims it stopped using facial recognition over three years ago, before the FTC inquiry began, in a small number of stores.
The pharmacy chain is currently undergoing Chapter 11 bankruptcy proceedings and faces lawsuits regarding its alleged role in the opioid crisis.
As part of restructuring efforts, Rite Aid plans to close over 150 stores across 15 states, on top of 210 closures this past fiscal year.
Rite Aid stated it remains focused on taking action to strengthen its financial position and continue providing services to its nearly one million daily customers.
This FTC ban on facial recognition tech comes amid heightened regulatory scrutiny around the use of AI.
The governance of the misuse of biometric data has become a top priority for the FTC.
Levine added, “Today’s groundbreaking order makes clear that the Commission will be vigilant in protecting the public from unfair biometric surveillance and unfair data security practices.”