Rite Aid has been banned from using facial recognition technology for five years following a Federal Trade Commission (FTC) ruling. The decision comes after the FTC found that Rite Aid's AI system, used between 2012 and 2020, incorrectly identified consumers, especially women and people of color, as shoplifters. This led to various forms of harassment, including wrongful accusations, police confrontations, and public humiliation.

The FTC's complaint highlights Rite Aid's failure to implement safeguards against these harms. The technology produced numerous false positives, misidentifying individuals based on poor-quality images and inaccurate matches. The system was more prone to errors in stores located in predominantly Black and Asian communities.

As part of the settlement, Rite Aid must now establish comprehensive procedures to mitigate risks when using biometric data and discontinue any such technology if it cannot ensure consumer safety. The company is also required to enhance its information security program and comply with a 2010 Commission data security order, which it previously violated.

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