Many consumer product companies—like other businesses—are turning to artificial intelligence-powered and automated decision-making, or ADM, technologies for operating efficiencies and enhanced customer experiences.
Companies embracing AI should look beyond compliance and develop a comprehensive risk management strategy.
Government enforcers are watching, and recent cases and agency guidance highlight the perils of not adopting appropriate safeguards for AI deployment.
Facial-Recognition Tech
The Federal Trade Commission filed a complaint and proposed settlement in December regarding Rite Aid’s use of AI-based facial-recognition surveillance technology in its stores.
Rite Aid allegedly violated Section 5 of the FTC Act by using facial-recognition technology that unfairly identified innocent customers as suspected shoplifters, resulting in increased surveillance and false accusations of criminal activity, among other harms. These misidentifications were said to disproportionately affect women and people of color.
According to the FTC, the pharmacy chain didn’t conduct reasonable due diligence before purchasing and deploying the technology, didn’t provide appropriate training and oversight…
