Rite Aid’s facial recognition ban: the order every AI deployer should read

In short: in December 2023 the FTC banned Rite Aid from using facial recognition for surveillance for five years, after alleging that the system wrongly flagged thousands of customers, more often in Black and Asian communities, without accuracy testing, staff training or vendor oversight. The order reads as a checklist for any AI that acts on people: test first, train the humans, monitor, oversee vendors, give notice.¹

On December 19, 2023 the US Federal Trade Commission announced it as a proposed settlement. Because Rite Aid was in bankruptcy, the order could take effect only after the bankruptcy court and the federal district court approved it; the stipulated order was entered in March 2024.^1,2 Rite Aid itself did not recover: it filed for bankruptcy a second time in May 2025 and had closed every store by October 2025.³ More than two years on, it remains the most detailed public account of how an AI deployment can fail customers, and of what a regulator considers reasonable safeguards.