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Kroger’s plan to use facial recognition sparks concerns about rising prices

Democratic Congresswoman Rashida Tlaib recently sent a letter to Kroger regarding the grocery giant’s alleged plan to introduce digital price tags that could be changed in an instant to raise or lower prices for shoppers based on time of day, weather or any number of other factors. factors. But one particular detail of Kroger’s plan raises the most eyebrows: The company intends to install cameras in stores that would be used for facial recognition.

News leaked over the summer that grocery giant Kroger was partnering with Microsoft to use electronic shelf labels, abbreviated in the grocery industry as ESL, as part of an AI initiative aimed at introducing dynamic pricing in its grocery stores. The plan also includes so-called Enhanced Displays for Grocery Environment (EDGE) shelf displays that would include cameras to capture customer information, including images of faces to better tailor advertisements.

But Rep. Tlaib, whose state of Michigan has 120 Kroger locations, expressed concerns about these technologies in her letter dated Oct. 11 and shared Tuesday for the first time publicly.

“Studies have shown that facial recognition technology is flawed and can lead to discrimination in predominantly black and brown communities,” Tlaib said in her letter. “Racial bias related to facial recognition technology is well documented and should not be extended to our grocery stores. »

Kroger is the largest grocery store chain in the United States by revenue and has a number of different brands, including Ralphs, Fred Meyer, Pick’n Save, Food 4 Less, and Dillions, among others. Tlaib fears that ESLs will allow Kroger stores to “use customer data to create personalized profiles of each customer” so they can “determine the maximum price for products that customers are willing to pay.”

The dynamic pricing and highly individualized advertising plan has drawn comparisons to the 2002 futuristic science fiction film Minority Report, in which Tom Cruise’s character receives advertisements targeting someone with a Japanese last name because he had the eyes of another man implanted.

Kroger told Gizmodo in an emailed statement Wednesday that the company’s business model “relies on lowering prices to attract more customers,” saying that “customers are shopping more with Kroger now that never because we fight inflation and deliver great value.” .”

But Kroger disagreed with claims that ESLs were used to raise prices.

“To be clear, Kroger does not and has never engaged in ‘price gouging.’ Any electronic shelf label test is designed to lower prices for more customers where it matters most. To suggest otherwise is not true,” the statement continued. This quote is identical to a statement CNN received from an anonymous Kroger spokesperson defending the technology in August.

Tlaib’s letter is not the first from lawmakers expressing concerns about facial recognition. Senators Elizabeth Warren and Bob Casey, both Democrats, sent a letter to Kroger in August asking about the company’s plans. As lawmakers put it, facial recognition could be used to “exploit sensitive customer data.”

Warren and Casey’s letter notes that analysts worry that dynamic grocery pricing means food could soon be sold for the same price as plane tickets, creating a sense of urgency and scarcity that wouldn’t exist otherwise with static prices. It is unclear whether Warren and Casey received satisfactory answers to their lists of questions.

Kroger is facing increased scrutiny over the company’s $24.6 billion merger with Albertson’s, which is currently pending in state courts in Washington and Colorado on antitrust grounds. Two Kroger executives took the stand Tuesday in Denver District Court, arguing the company needs to acquire Albertson’s in order to compete with Walmart’s grocery business, according to the Denver Post. The FTC also challenged the merger, arguing that it would reduce competition and raise prices for consumers.