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Rite Aid Banned from Using AI Facial Recognition After FTC Says Retailer Deployed Technology without Reasonable Safeguards
FTC says Rite Aid technology falsely tagged consumers, particularly women and people of color, as shoplifters; Ban will last five years
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Rite Aid will be prohibited from using facial recognition technology for surveillance purposes for five years to settle Federal Trade Commission charges that the retailer failed to implement reasonable procedures and prevent harm to consumers in its use of facial recognition technology in hundreds of stores.
“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,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “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.”
The proposed order will require Rite Aid to implement comprehensive safeguards to prevent these types of harm to consumers when deploying automated systems that use biometric information to track them or flag them as security risks. It also will require Rite Aid to discontinue using any such technology if it cannot control potential risks to consumers. To settle charges it violated a 2010 Commission data security order by failing to adequately oversee its service providers, Rite Aid will also be required to implement a robust information security program, which must be overseen by the company’s top executives.
In a complaintfiled in federal court, the FTC says that from 2012 to 2020, Rite Aid deployed artificial intelligence-based facial recognition technology in order to identify customers who may have been engaged in shoplifting or other problematic behavior. The complaint, however, charges that 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.
Preventing the misuse of biometric information is a high priority for the FTC, which issued a warning earlier this year that the agency would be closely monitoring this sector. Rite Aid’s actions subjected consumers to embarrassment, harassment, and other harm, according to the complaint. The company did not inform consumers that it was using the technology in its stores and employees were discouraged from revealing such information. Employees, acting on false positive alerts, followed consumers around its stores, searched them, ordered them to leave, called the police to confront or remove consumers, and publicly accused them, sometimes in front of friends or family, of shoplifting or other wrongdoing, according to the complaint. In addition, the FTC says Rite Aid’s actions disproportionately impacted people of color.
According to the complaint, Rite Aid contracted with two companies to help create a database of images of individuals—considered to be “persons of interest” because Rite Aid believed they engaged in or attempted to engage in criminal activity at one of its retail locations—along with their names and other information such as any criminal background data. The company collected tens of thousands of images of individuals, many of which were low-quality and came from Rite Aid’s security cameras, employee phone cameras and even news stories, according to the complaint.
The system generated thousands of false-positive matches, the FTC says. For example, the technology sometimes matched customers with people who had originally been enrolled in the database based on activity thousands of miles away, or flagged the same person at dozens of different stores all across the United States, according to the complaint. Specifically, the complaint says Rite Aid failed to:
- Consider and mitigate potential risks to consumers from misidentifying them, including heightened risks to certain consumers because of their race or gender. For example, Rite Aid’s facial recognition technology was more likely to generate false positives in stores located in plurality-Black and Asian communities than in plurality-White communities;
- Test, assess, measure, document, or inquire about the accuracy of its facial recognition technology before deploying it, including failing to seek any information from either vendor it used to provide the facial recognition technology about the extent to which the technology had been tested for accuracy;
- Prevent the use of low-quality images in connection with its facial recognition technology, increasing the likelihood of false-positive match alerts;
- Regularly monitor or test the accuracy of the technology after it was deployed, including by failing to implement or enforce any procedure for tracking the rate of false positive matches or actions that were taken based on those false positive matches; and
- Adequately train employees tasked with operating facial recognition technology in its stores and flag that the technology could generate false positives. Even after Rite Aid switched to a technology that enabled employees to report a “bad match” and required employees to use it, the company did not take action to ensure employees followed this policy.
In its complaint, the FTC also says Rite Aid violated its 2010 data security order with the Commission by failing to adequately implement a comprehensive information security program. Among other things, the 2010 order required Rite Aid to ensure its third-party service providers had appropriate safeguards to protect consumers’ personal data. For example, the complaint alleges the company conducted many security assessments of service providers orally, and that it failed to obtain or possess backup documentation of such assessments, including for service providers Rite Aid deemed to be “high risk.”
In addition to the ban and required safeguards for automated biometric security or surveillance systems, other provisions of the proposed order prohibit Rite Aid from misrepresenting its data security and privacy practices and also require the company to:
- Delete, and direct third parties to delete, any images or photos they collected because of Rite Aid’s facial recognition system as well as any algorithms or other products that were developed using those images and photos;
- Notify consumers when their biometric information is enrolled in a database used in connection with a biometric security or surveillance system and when Rite Aid takes some kind of action against them based on an output generated by such a system;
- Investigate and respond in writing to consumer complaints about actions taken against consumers related to an automated biometric security or surveillance system;
- Provide clear and conspicuous notice to consumers about the use of facial recognition or other biometric surveillance technology in its stores;
- Delete any biometric information it collects within five years;
- Implement a data security program to protect and secure personal information it collects, stores, and shares with its vendors;
- Obtain independent third-party assessments of its information security program; and
- Provide the Commission with an annual certification from its CEO documenting Rite Aid’s adherence to the order’s provisions.
The Commission voted 3-0 to authorize staff to file the complaint and the proposed stipulated order against Rite Aid. Commissioner Alvaro Bedoya released a statement.
The complaint and order were filed in the Eastern District of Pennsylvania. Rite Aid is currently going through bankruptcy proceedings and the order will go into effect after approval from the bankruptcy court and the federal district court as well as modification of the 2010 order by the Commission.
The principal attorneys on these matters are Robin Wetherill, Leah Frazier, Diana Chang, Christopher Erickson, and Brian Welke in the FTC’s Bureau of Consumer Protection.
The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.
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FTC Acts to Stop Sprawling Business Opportunity Scheme That Took Millions From Consumers
At FTC’s request, federal court temporarily halts operation of scheme sometimes known as ‘Blueprint to Wealth’
Tags:
- Consumer Protection
- Bureau of Consumer Protection
- Franchises, Business Opportunities, and Investments
At the request of the Federal Trade Commission, a federal court has temporarily halted the operation of a sprawling business opportunity scheme that has taken in millions of dollars from consumers with bogus promises of huge returns.
The scheme has operated since at least 2018 under a number of names, including “Blueprint to Wealth,” according to the FTC’s complaint. Three individuals — Samuel James Smith, Robert William Shafer and Charles Joseph Garis, Jr. — and a company owned by one of them — Business Revolution Group — are charged in the complaint with operating the scheme.
Blueprint to Wealth targets consumers looking to build their own businesses with a program that offers essentially no value, other than commissions that come from encouraging others to join the scheme, according to the complaint.
“Schemes like this use bogus claims to lure in consumers who are trying to provide for their families, only to leave people’s finances in tatters,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The FTC will continue to track down and stop those who deceive consumers out of their hard-earned money.”
The complaint alleges that consumers were charged at least $3,000 and as much as $21,000, plus additional hundreds in “administrative fees,” for membership in the scheme, which nominally promises its members turnkey online businesses that would be operated on the members’ behalf.
Advertising and marketing for the businesses is controlled by the scheme’s operators and the businesses exist entirely to sell Blueprint to Wealth memberships, the complaint charges.
The complaint charges that the scheme’s marketing is rife with false claims. One robocall used by the scheme claims to be from a member saying, “I actually make $50,000 each month,” and a scheme website says, among other claims, that consumers could “start earning $3,500 weekly within 3-10 days From Now!” Another website includes videos that claim to be from scheme members who made tens of thousands of dollars in little time.
The complaint charges that Shafer and Garis used robocalls, telemarketing, and social media ads to contact consumers and convince them to join the Blueprint to Wealth scheme. The complaint notes that in one call with a consumer in her seventies, Garis told the consumer that she could “get out of debt quicker” and begin making a profit if she joined Blueprint to Wealth, a recommendation he made while knowing that the consumer was a retiree in need of extra money.
Smith, according to the complaint, acted as the scheme’s administrator, controlling its online headquarters and goods and services that consumers receive with membership in Blueprint to Wealth.
The court’s order temporarily bars the defendants from misrepresenting or assisting others in misrepresenting material facts about any business or money-making opportunity. It also freezes the defendants’ assets until further action by the court. The FTC’s complaint asks the court to shut down the defendants’ scheme permanently and allow the FTC to provide refunds to the consumers harmed by the scheme.
The Commission vote authorizing the staff to file the complaint was 3-0. The complaint was filed in the U.S. District Court for the Eastern District of Pennsylvania.
NOTE: The Commission files a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. The case will be decided by the court.
The staff attorneys on this matter are Connell McNulty and Lauren Rivard of the FTC’s Bureau of Consumer Protection.
The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.
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L’Autorité inflige à Sony une sanction de 13,5 M€ pour avoir abusé de sa position dominante (manettes de jeux vidéo pour PS4)
Publié le 20 décembre 2023Imprimer la page
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À la suite d’une saisine de Subsonic, fabricant français de manettes de jeux vidéo, l’Autorité sanctionne Sony (quatre sociétés du groupe, dont la société mère japonaise) pour avoir abusé, pendant plus de 4 ans, de sa position dominante sur le marché de la fourniture de manettes de jeux vidéo pour consoles Playstation 4.
L’Autorité sanctionne deux pratiques :
- D’une part, le déploiement par Sony, à compter de novembre 2015, d’un dispositif de contre-mesures techniques, prétendument mis en œuvre pour lutter contre la contrefaçon, et qui a eu pour effet d’affecter le bon fonctionnement des manettes de jeux tierces (produites par d’autres fabricants que Sony et ne bénéficiant pas d’une licence officielle de cette dernière), conduisant régulièrement à leur déconnexion lors des mises à jour du système d’exploitation de la console.
Si l’Autorité souligne la légitimité de l’objectif de lutte contre la contrefaçon, elle relève cependant que de telles mesures étaient disproportionnées, puisqu’elles affectaient indistinctement l’ensemble des manettes « hors licence ».
- -D’autre part, une politique d’octroi de licence opaque, ayant dans un certain nombre de cas conduit à une impossibilité, pour des entreprises concurrentes souhaitant commercialiser des manettes compatibles avec la console Playstation 4, d’intégrer le programme de partenariat dit « OLP », seule possibilité pour les tiers d’obtenir une licence officielle et les numéros d’identification uniques. L’Autorité relève qu’en refusant de communiquer aux fabricants qui en faisaient la demande les critères d’accès au programme OLP, Sony a pu les appliquer de manière discrétionnaire, alors même que l’accès à ce dernier était le seul moyen d’éviter les déconnexions.
L’Autorité retient que la combinaison de ces deux pratiques a significativement nui à l’image de marque des fabricants tiers affectés, tant vis-à-vis des joueurs que vis-à-vis des distributeurs, freinant leur expansion sur le marché et conduisant à leur possible éviction.
La sanction, qui s’élève à 13 527 000 euros, est infligée solidairement à 3 filiales et à la société mère du groupe Sony:
- Sony Interactive Entertainment Europe Limited (chargée du programme de licence en Europe),
- Sony Interactive Entertainment Inc. K.K (chargée du déploiement des mises à jour du système d’exploitation de la console PS4),
- Sony Interactive Entertainment France (chargée de la commercialisation des manettes en France,
- Sony Group Corporation (société mère).
COMMUNIQUÉ DE PRESSE DU 20 DÉCEMBRE 2023
L’Autorité de la concurrence inflige à Sony une sanction de 13,5 millions d’euros pour avoir abusé de sa position dominante sur le marché de la fourniture de manettes de jeux vidéo pour PS4
CMA and Bank of England agree new understanding to improve collaboration
The CMA and the Bank of England have, for the first time, agreed a memorandum of understanding on how the two organisations will work together to deliver better outcomes for the UK economy, businesses and consumers.From:Competition and Markets AuthorityPublished19 December 2023
The memorandum of understanding explains how the organisations will collaborate on issues where they have shared interests. This includes promoting a culture of cooperation and collaboration between the Competition and Markets Authority (CMA) and the Bank of England, and sets out how they will share information to assist each other in carrying out their functions.
To read the memorandum of understanding, visit the CMA’s website.
Investigation into Meta’s (formerly Facebook) use of data
The CMA has accepted commitments that address the CMA’s competition concerns regarding Meta’s use of data obtained through digital display advertising.
From: Competition and Markets Authority
Published4 June 2021Last updated20
December 2023 — See all updates
Case type: CA98 and civil cartels
Case state:Closed
Market sector:Communications
Outcome:CA98 – commitments
Opened: 3 June 2021
Closed: 3 November 2023
Cloud services market investigation
The CMA is investigating the supply of public cloud infrastructure services in the UK.
From: Competition and Markets Authority
Published 5 October 2023
Last updated 20 December 2023 — See all updates
Case type: Markets
Case state: Open
Market sector: Electronics
Opened:5 October 2023
Casos
FTC
Weblio
At the FTC’s request, a federal court has temporarily halted the operation of a sprawling business opportunity scheme that has taken in millions of dollars from consumers with bogus promises of huge returns. The scheme has operated since at least 2018 under a number of names, including “Blueprint to Wealth,” according to the FTC’s complaint. Three individuals — Samuel James Smith, Robert William Shafer and Charles Joseph Garis, Jr. — and a company owned by one of them — Business Revolution Group — are charged in the complaint with operating the scheme.
Type of Action
Administrative
Last Updated
December 19, 2023
Case Status
Pending
Statement of Commissioner Alvaro M. Bedoya On FTC v. Rite Aid Corporation
Date
December 19, 2023
By
Alvaro Bedoya, Commissioner
Matter Number
2023190
Comissão Europeia
ADVENT / GFK
Merger
Last decision date: 19.12.2023
Autorité de la Concurrence
23-D-14
relative à des pratiques mises en œuvre dans les secteurs des consoles statiques de jeux vidéo de huitième génération et des accessoires de contrôle compatibles avec la console PlayStation 4
Décision|
20 décembre 2023