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Facial recognition use by retailers raise privacy concerns


Big-box retailers such as Walmart are using facial recognition technology to identify suspected thieves, which has raised a number of privacy concerns among the public, according to a report by Fortune.

Earlier this year, Walmart tested a facial recognition system that automatically scanned the face of all customers entering several of its stores across many states.

The facial recognition technology matches faces against a database containing a number of alleged offenders.

If a match is found, the system promptly notifies store security personnel via their mobile devices, sending a profile of the suspect and a “corporate directive” of how to respond.

Joe Rosenkrantz, CEO of FaceFirst, one company that sells facial recognition solutions to retailers, said the technology is designed to “transform security at every store.”

Rosenkrantz said that while many Fortune 500 retailers are using FaceFirst software, he could not disclose specific names due to non-disclosure agreements.

“The system is smart enough to notify a loss prevention associate on their iPhone within seven seconds,” said Rosenkrantz,

Retailers using FaceFirst do not retain photos of all individuals entering the store — only the photos of previously flagged suspects or people who resemble these suspects.

“We give them a mobile app,” says Rosenkrantz. “It makes it so they can zap someone’s face. It puts a grid on their face [for future identification]”

When contacted by Fortune, Home Depot said that it does not use face scanning software, Walgreens said it does not have a contract with FaceFirst, and Target would neither confirm or deny if it uses the software.

In fact, Walmart is the only company that admitted to using FaceFirst in a pilot that took place earlier this year, which lasted for several months before the company decided to discontinue the practice.

The technology’s use by retailers have raised several concerns about whether retailers should adhere to certain regulations when using facial recognition technology to ensure that they do not infringe the privacy rights of consumers.

“The whole issue of facial recognition and biometrics has been discussed for a while, and there’s no consensus of how the privacy structure should work,” says Jeffrey Neuburger, a lawyer who heads the Proskauer’s privacy and data security group in New York.

Neuburger said the discussion often leads to whether retailers must legally notify consumers that they are using the technology, or provide them with options to opt-out options.

In June, the National Telecommunication and Information Administration, a division of the U.S. Department of Commerce, met in an attempt to create a set of rules to regulate the commercial use of facial recognition technology. However, these efforts quickly fizzled after nine privacy advocate groups left the group.

As a result, companies have the right to engage in relatively unrestricted use of facial recognition solutions, with the exceptions of companies operating in Illinois and Texas, where state laws limit collection of biometric data.

Neuburger said that while it is possibly that the Federal Trade Commission could try to regulate the industry under its unfair trade practice authority, the agency does not have the authority to create news laws on its own.

He added that it is highly unlikely that Congress will pass broader laws regarding privacy and facial recognition in the near future.

Previously reported, business solutions and services provider CSC released a new report entitled “Next generation in-store technology: Where do shoppers and retailers stand?”, which finds that 25% of UK retailers are using facial recognition technology in an effort to monitor customer activities at their stores.

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