Rite Aid Reaches Settlement with FTC

Rhea-AI Summary

Rite Aid Corporation (OTC: RADCQ) has reached a settlement agreement with the U.S. Federal Trade Commission regarding the historical use of facial recognition technology to prevent retail theft and compliance issues. The company will enhance its information security program as part of the agreement.

PHILADELPHIA--(BUSINESS WIRE)-- Rite Aid Corporation (OTC: RADCQ) (“Rite Aid” or the “Company”) today announced it has reached a comprehensive settlement agreement with the U.S. Federal Trade Commission (“FTC”) regarding the Company’s historical use of facial recognition technology to prevent retail theft and issues relating to the Company’s compliance with a 2010 Commission Order.

The Company issued the following statement:

“We are pleased to reach an agreement with the FTC and put this matter behind us. We respect the FTC’s inquiry and are aligned with the agency’s mission to protect consumer privacy. However, we fundamentally disagree with the facial recognition allegations in the agency’s complaint. The allegations relate to a facial recognition technology pilot program the Company deployed in a limited number of stores. Rite Aid stopped using the technology in this small group of stores more than three years ago, before the FTC’s investigation regarding the Company’s use of the technology began.

Rite Aid’s mission has always been and will continue to be to safely and conveniently serve the communities in which we operate. The safety of our associates and customers is paramount. As part of the agreement with the FTC, we will continue to enhance and formalize the practices and policies of our comprehensive information security program.

Looking ahead, we are focused on the important actions underway to strengthen our financial position as we continue providing leading healthcare products and services to the nearly one million customers that we serve daily.”

The settlement with the FTC is subject to approval by the U.S. Bankruptcy Court overseeing Rite Aid’s ongoing restructuring and the U.S. Federal District Court in which the FTC filed its complaint.

Additional Information

Additional information regarding the Company’s court-supervised process is available at www.riteaidrestructuring.com. Court filings and other information related to the proceedings are available on a separate website administrated by the Company’s claims agent, Kroll, at https://restructuring.ra.kroll.com/RiteAid; by calling Kroll toll-free at (844) 274-2766, or (646) 440-4878 for calls originating outside of the U.S. or Canada; or by emailing Kroll at RiteAidInfo@ra.kroll.com.

Kirkland & Ellis LLP is serving as legal advisor, Guggenheim Securities is serving as investment banker and Alvarez & Marsal is serving as transformation officer and financial advisor to the Company.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes statements that may constitute “forward-looking statements,” including expectations regarding the Company’s business plan and initiatives, the Company’s ability to continue to operate its business as currently contemplated, and the effect of the Company’s Chapter 11 reorganization, and other statements regarding the Company’s plans and strategy. When used in this document, the words “will,” “continue,” and similar expressions are generally intended to identify forward-looking statements. These statements are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. A number of important factors could cause actual results of the Company and its subsidiaries to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks and uncertainties outlined in the risk factors detailed in Item 1A. “Risk Factors,” of the Company’s Annual Report on Form 10-K for the fiscal year ended March 4, 2023 (as filed with the Securities and Exchange Commission (“SEC”) on May 1, 2023) and other risk factors identified from time to time in the Company’s filings with the SEC. Readers should carefully review these risk factors, and should not place undue reliance on the Company’s forward-looking statements. The Company undertakes no obligation to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231215386190/en/

INVESTORS:

Byron Purcell

(717) 975-3710

investor@riteaid.com

MEDIA:

Joy Errico

(717) 975-5718

press@riteaid.com

Source: Rite Aid Corporation

FAQ

What is the settlement agreement between Rite Aid Corporation and the U.S. Federal Trade Commission?

The settlement agreement is related to Rite Aid's historical use of facial recognition technology to prevent retail theft and issues regarding the company's compliance with a 2010 Commission Order.

What is Rite Aid's ticker symbol?

The ticker symbol for Rite Aid Corporation is OTC: RADCQ.

What steps will Rite Aid take as part of the agreement with the FTC?

Rite Aid will continue to enhance and formalize the practices and policies of its comprehensive information security program.

Who are the legal and financial advisors for Rite Aid?

Kirkland & Ellis LLP is serving as legal advisor, Guggenheim Securities is serving as investment banker, and Alvarez & Marsal is serving as transformation officer and financial advisor to the Company.

Where can additional information about Rite Aid's court-supervised process be found?

Additional information is available at www.riteaidrestructuring.com and through the Company's claims agent, Kroll.

What is Rite Aid's mission?

Rite Aid's mission is to safely and conveniently serve the communities in which it operates, with a focus on the safety of its associates and customers.