Australia’s Privacy Commissioner has ruled that Kmart unlawfully collected sensitive biometric data by using facial recognition technology (FRT) in dozens of stores without customer consent.
Between June 2020 and July 2022, the retailer deployed FRT across 28 outlets, capturing the faces of every shopper who entered and anyone presenting at returns counters in an effort to curb refund fraud. Commissioner Carly Kind found the practice breached the Privacy Act, which affords heightened protection for biometric information.
Kmart argued the collection fell under an exemption allowing personal data to be gathered to prevent unlawful activity. However, the Commissioner determined that the company’s sweeping use of FRT was “a disproportionate interference with privacy,” noting that thousands of customers unconnected to fraud were affected. The system’s effectiveness was also limited, and alternative, less intrusive methods could have been employed.
“The sensitive biometric information of every individual who entered a store was indiscriminately collected,” Commissioner Kind said. “I do not consider that Kmart could have reasonably believed that the benefits of the FRT system proportionately outweighed the impact on individuals’ privacy.”
The decision is the second from the Office of the Australian Information Commissioner (OAIC) concerning FRT in retail. In October 2024, Bunnings was also found to have violated privacy law through similar technology, a ruling currently under review.
Kmart ceased using facial recognition in mid-2022 when the investigation began and has cooperated with regulators. The OAIC stressed that while FRT is not banned, businesses must ensure its deployment complies with the Privacy Act, taking into account proportionality, transparency, and the risks of bias or discrimination.
Guidance for retailers on managing privacy risks associated with facial recognition is available on the OAIC’s website.
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