WASHINGTON - Bankrupt U.S. pharmacy chain Rite Aid will be prohibited from using facial recognition technology for surveillance purposes for five years to settle U.S. Federal Trade Commission charges it harmed consumers, the FTC said on Tuesday.

Rite Aid deployed artificial intelligence-based facial recognition technology from 2012 to 2020 in order to identify shoplifters but the company falsely flagged some consumers as matching someone who had previously been identified as a shoplifter, the FTC said.

Rite Aid in a statement said the 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’s complaint and ban followed a Reuters investigation from 2020 into Rite Aid’s facial recognition program.

That investigation found Rite Aid quietly added facial recognition systems to hundreds of stores in the United States, and that in New York and Los Angeles, Rite Aid deployed the technology in largely lower-income, non-white neighborhoods.

After Reuters sent its findings to Rite Aid in July 2020, Rite Aid said it quit using its facial recognition software.

  - Reuters