Kroger’s plan to use facial recognition technology raises concerns about price hikes

Democratic congresswoman Rashida Tlaib recently sent a letter to Kroger regarding the alleged plan by the grocery giant to introduce digital price tags that can be changed in an instant to raise or lower prices for shoppers based on the time of day, weather, or any number of other factors. But one specific detail in Kroger’s plan is raising eyebrows: the company plans to install cameras in stores that will be used to identify faces.

News leaked over the summer indicating that the grocery giant Kroger was partnering with Microsoft to use Electronic Shelf Labels (ESLs), shortened in the grocery industry as ESLs, as part of an artificial intelligence campaign to establish dynamic pricing in its grocery stores. The plan also includes so-called Enhanced Display for Grocery Environment (EDGE) screens that are said to include cameras to capture customer information, including face images for better advertising customization.

But Congresswoman Tlaib, who has 120 Kroger locations in her state of Michigan, expressed concern about these technologies in her letter dated October 11, which she shared publicly for the first time on Tuesday.

Tlaib stated in her letter: “Studies have shown that facial recognition technology is flawed and can lead to discrimination in black and brown majority communities.” “Racial biases in facial recognition technology are well-documented and should not extend to our grocery stores.”

Kroger is the largest grocery store chain in the United States in terms of revenue and owns a number of different brands, including Ralphs, Fred Meyer, Pick’n Save, Food 4 Less, and Dillions, among a large group of other brands. Tlaib is concerned that allowing ESLs for Kroger stores “using customer data to build profiles for each customer” in a way that allows them to “determine the maximum price for goods customers are willing to pay.”

The dynamic pricing and highly individualized advertising plan drew comparisons to the 2002 futuristic sci-fi film Minority Report, where character Tom Cruise receives ads targeting a person with implanted eyes of another man holding a Japanese title.

Kroger stated to Gizmodo in an email statement on Wednesday that the company’s business model is “built on lowering prices to attract more customers,” claiming that “customers are now shopping with Kroger more than ever because we fight inflation and offer great value.”

However, Kroger did not agree with claims that ESLs will be used to raise prices.

“To be clear, Kroger has not and never has engaged in ‘surge pricing.’ Any test for electronic shelf tags is designed to lower prices for more customers in key locations,” the statement continued. “The implication otherwise is untrue.” This quote aligns with a statement provided to CNN by a Kroger spokesperson who defended the technology in August.

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

The letter from Warren and Casey indicated that analysts are concerned that dynamic pricing in grocery stores could mean that groceries are soon priced like airline tickets, creating a sense of urgency and scarcity that did not exist with fixed prices. It is unclear whether Warren and Casey received satisfactory answers to their questions.

Kroger is facing increasing scrutiny over its $24.6 billion merger with Albertsons, which is currently navigating its way through state courts in Washington and Colorado due to antitrust concerns. Two Kroger executives took a stand in a Denver County court on Tuesday arguing that acquiring Albertson’s is necessary to compete against Walmart’s grocery business, according to the Denver Post. The Federal Trade Commission also opposed the merger, arguing that it will reduce competition and raise prices for consumers.