In a landmark privacy decision, New Zealand’s Privacy Commissioner has ruled that the use of facial recognition technology (FRT) by Foodstuffs supermarkets in the North Island is “justified” under the Privacy Act, provided strict safeguards remain in place. The conclusion follows a detailed six-month trial that ended in September 2024, during which the FRT system operated across 25 stores.
The Privacy Commissioner, Michael Webster, acknowledged the inherent privacy concerns such as the potential for misidentification, technical bias, and surveillance risks—but concluded that the benefits to safety and crime prevention outweigh the risks, provided customer rights are protected.
“FRT will only be acceptable if the use is necessary and the privacy risks are successfully managed,” Webster said.
The FRT system deployed during the trial is designed with privacy-first architecture, incorporating the following key features:
No Storage of Customer Faces: Over 226 million face scans were recorded (including multiple scans of returning customers), but 99.999% of all images were automatically deleted within 60 seconds, unless matched to a pre-approved watchlist.
Strict Watchlist Protocols: Only individuals involved in serious harmful behaviour, such as theft or violence, were added to store watchlists. No minors or vulnerable persons were included.
Real-Time Matching & Deletion: The system only retains images briefly during live scanning and immediately discards unmatched images.
Human Verification: Every alert generated by the FRT system was verified by two trained staff members to avoid false identifications.
No Sharing Between Stores: Watchlist data was kept store-specific; no cross-store database existed, mitigating surveillance expansion concerns.
Access Restrictions: Only authorised personnel could access the FRT system or review data, and no images were used for training future algorithms.
The system triggered 1,742 alerts, of which 1,208 were verified matches to individuals on store watchlists. The trial is credited with preventing more than 100 cases of serious harm, including assaults and thefts, according to an independent evaluator.
However, nine people were misidentified, and two were asked to leave. These incidents were attributed to human error, not algorithmic faults, and were deemed statistically minimal when compared to the security benefits.
The Commissioner noted that since the FRT software was developed overseas, it may not perform equally across all demographics, raising concerns over potential bias against Māori and Pacific communities.
As a result, Webster has required ongoing monitoring and review, particularly with regard to skin tone accuracy, before the technology can be permanently adopted.
“We expect Foodstuffs to evaluate the impact of skin tone on identification accuracy and store response,” Webster said.
Julian Benefield, General Counsel for Foodstuffs North Island, said the organisation is pleased the Commissioner has acknowledged their effort to balance security with privacy.
“Retail crime remains a serious and complex issue. We have worked closely with the Privacy Commissioner and are proud the system prevented harm while respecting privacy,” he said.
Retail NZ’s CEO, Carolyn Young, echoed this sentiment, stating that the FRT trial demonstrated real-world impact by reducing theft and enhancing staff safety.
“Retailers across New Zealand are now exploring similar solutions,” she said. “With violence and crime on the rise, FRT offers a proactive tool to safeguard both employees and customers.”