U.S. Federal Trade Commission (FTC) — Rite Aid Corporation
FTC banned Rite Aid from using facial-recognition AI in any form for 5 years after finding the company deployed the technology in hundreds of stores without reasonable safeguards. The system disproportionately misidentified women and people of colour as shoplifters, leading to wrongful detentions and humiliating searches. Cited FTC Act §5 (unfair and deceptive practices). The same biometric-identification deployment in a US jurisdiction with an AI law (e.g. Colorado AI Act once 'consequential decisions' kicks in, or any future federal AI law) would face direct duties on bias testing, deployer impact assessments and consumer notice.
Key takeaway — how to prevent this
Biometric data (faces, iris, fingerprints) needs an explicit lawful basis or consent. Scraping or capturing it without one is unlawful across the EU/UK and many US states (e.g. Illinois BIPA) — and draws the largest fines.
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