[Federal Register Volume 89, Number 235 (Friday, December 6, 2024)]
[Notices]
[Pages 96984-96986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-28716]
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FEDERAL TRADE COMMISSION
[File No. 232 3023]
IntelliVision Technologies Corp.; Analysis of Proposed Consent
Order To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement; request for comment.
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SUMMARY: The consent agreement in this matter settles alleged
violations of Federal law prohibiting unfair or deceptive acts or
practices. The attached Analysis of Proposed Consent Order to Aid
Public Comment describes both the allegations in the complaint and the
terms of the consent order--embodied in the consent agreement--that
would settle these allegations.
DATES: Comments must be received on or before January 6, 2025.
ADDRESSES: Interested parties may file comments online or on paper by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Please write ``IntelliVision;
File No. 232 3023'' on your comment and file your comment online at
https://www.regulations.gov by following the instructions on the web-
based form. If you prefer to file your comment on paper, please mail
your comment to the following address: Federal Trade Commission, Office
of the Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex
F), Washington, DC 20580.
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FOR FURTHER INFORMATION CONTACT: Robin Rosen Spector (202-326-3740),
Attorney, Division of Privacy and Identity Protection, Bureau of
Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue
NW, Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule Sec. 2.34, 16 CFR
2.34, notice is hereby given that the above-captioned consent agreement
containing a consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of 30 days. The following
Analysis to Aid Public Comment describes the terms of the consent
agreement and the allegations in the complaint. An electronic copy of
the full text of the consent agreement package can be obtained at
https://www.ftc.gov/news-events/commission-actions.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before January 6, 2025.
Write ``IntelliVision; File No. 232 3023'' on your comment. Your
comment--including your name and your State--will be placed on the
public record of this proceeding, including, to the extent practicable,
on the https://www.regulations.gov website.
Because of heightened security screening, postal mail addressed to
the Commission will be subject to delay. We strongly encourage you to
submit your comments online through the https://www.regulations.gov
website. If you prefer to file your comment on paper, write
``IntelliVision; File No. 232 3023'' on your comment and on the
envelope, and mail your comment to the following address: Federal Trade
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Mail
Stop H-144 (Annex F), Washington, DC 20580.
Because your comment will be placed on the publicly accessible
website at https://www.regulations.gov, you are solely responsible for
making sure your comment does not include any sensitive or confidential
information. In particular, your comment should not include sensitive
personal information, such as your or anyone else's Social Security
number; date of birth; driver's license number or other State
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure your comment does not include
sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule Sec.
4.10(a)(2), 16 CFR 4.10(a)(2)--including competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule Sec. 4.9(c). In
particular, the written request for confidential treatment that
accompanies the comment must include the factual and legal basis for
the request and must identify the specific portions of the comment to
be withheld from the public record. See FTC Rule Sec. 4.9(c). Your
comment will be kept confidential only if the General Counsel grants
your request in accordance with the law and the public interest. Once
your comment has been posted on the https://www.regulations.gov
website--as legally required by FTC Rule Sec. 4.9(b)--we cannot redact
or remove your comment from that website, unless you submit a
confidentiality request that meets the requirements for such treatment
under FTC Rule Sec. 4.9(c), and the General Counsel grants that
request.
Visit the FTC website at https://www.ftc.gov to read this document
and the news release describing the proposed settlement. The FTC Act
and other laws the Commission administers permit the collection of
public comments to consider and use in this proceeding, as appropriate.
The Commission will consider all timely and responsive public comments
it receives on or before January 6, 2025. For information on the
Commission's privacy policy, including routine uses permitted by the
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.
Analysis of Proposed Consent Order To Aid Public Comment
The Federal Trade Commission (``Commission'') has accepted, subject
to final approval, an agreement containing a consent order from
IntelliVision Technologies Corp. (``IntelliVision'' or ``Respondent'').
The proposed consent order (``Proposed Order'') has been placed on the
public record for 30 days for receipt of public comments from
interested persons. Comments received during this period will become
part of the public record. After 30 days, the Commission will again
review the agreement, along with the comments received, and will decide
whether it should make final the Proposed Order or withdraw from the
agreement and take appropriate action.
IntelliVision is a Delaware corporation with its principal place of
business in San Jose, California. Respondent advertises and sells an
artificial intelligence-based facial recognition software product to
original equipment manufacturers, large integrators, and large end
users. Respondent's facial recognition software has been incorporated
into two consumer products sold by its parent corporation Nice North
America, LLC: the 2GIG Edge, a home security system; and the Elan
Intelligent Touch Panel, a smart home touch panel. The software allows
consumers to register their face and then scan their face to gain
access to the 2GIG Edge home security system. Similarly, the software
allows consumers to register their face and then scan their face to
gain access to the smart home features of the Elan Intelligent Touch
Panel.
The Commission's proposed three-count complaint alleges that
Respondent represented that IntelliVision's facial recognition software
has one of the highest accuracy rates on the market and has been
trained on millions of faces. The proposed complaint further alleges
that Respondent represented that IntelliVision's facial recognition
software can detect faces of all ethnicities without racial bias, was
developed with multi-ethnic and gender datasets to ensure no built-in
bias and performs with zero gender or racial bias. In addition, the
proposed complaint alleges that IntelliVision claimed its anti-spoofing
technology ensures the system cannot be fooled by photo or video
images. According to the proposed complaint, these claims are false or
misleading or were not substantiated at the time the representations
were made, in violation of section 5 of the FTC Act.
The Proposed Order contains injunctive relief designed to prevent
Respondent from engaging in the same or similar acts or practices in
the future. Provision I prohibits Respondent from making any
misrepresentation (1) about the accuracy or efficacy of its Facial
Recognition Technology; (2) about the comparative performance of its
Facial Recognition Technology with respect to individuals of different
genders, ethnicities, and skin tones, or reducing or eliminating
differential performance
[[Page 96986]]
based on such factors; or (3) about the accuracy or efficacy of its
Facial Recognition Technology with respect to detecting spoofing or
otherwise determining Liveness. (Facial Recognition Technology and
Liveness are defined in the Proposed Order.)
Provision II prohibits Respondent from making any representation
about the effectiveness, accuracy, or lack of bias of Facial
Recognition Technology, or about the effectiveness of such Facial
Recognition Technology at detecting spoofing, unless Respondent
possesses and relies upon competent and reliable testing that
substantiates the representation at the time the representation is
made. For the purposes of this Provision, competent and reliable
testing means testing that is based on the expertise of professionals
in the relevant area, and that (1) has been conducted and evaluated in
an objective manner by qualified persons and (2) is generally accepted
by experts in the profession to yield accurate and reliable results.
Respondent also must document all such testing including: the dates and
results of all tests; the method and methodology used; the source and
number of images used; the source and number of different people in the
images; whether such testing includes Liveness tests; any technique(s)
used to modify the images to create different angles, different
lighting conditions or other modifications; demographic information
collected on images used in testing if applicable; information about
the skin tone collected on images used in testing if applicable; and
any information that supports, explains, qualifies, calls into question
or contradicts the results. Provision III requires Respondent to obtain
and submit acknowledgments of receipt of the Order.
Provisions IV-VI are reporting and compliance provisions, which
include recordkeeping requirements and provisions requiring Respondent
to provide information or documents necessary for the Commission to
monitor compliance. Provision VII states the Proposed Order will remain
in effect for 20 years, with certain exceptions.
The purpose of this analysis is to facilitate public comment on the
Proposed Order, and it is not intended to constitute an official
interpretation of the complaint or Proposed Order, or to modify the
Proposed Order's terms in any way.
By direction of the Commission.
April J. Tabor,
Secretary.
Concurring Statement of Commissioner Andrew N. Ferguson
Today, the Commission approves a complaint and settlement against
IntelliVision, a developer of facial recognition software.\1\ Count I
charges IntelliVision with misrepresenting the efficacy of its
software. IntelliVision claimed that its software had one of the
highest accuracy rates in the world, but in reality it was not even
among the top hundred best performing algorithms tested by the National
Institute of Standards and Technology.\2\ Count I further accuses
IntelliVision of claiming that its software was trained on ``millions''
of faces, when the software was in fact trained on only 100,000
faces.\3\ Count III accuses IntelliVision of claiming that its software
could not be fooled by photo or video images even though it had
insufficient evidence to support that categorical claim.\4\ I support
these counts without reservation.
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\1\ Complaint, In re IntelliVision Technologies Corp.
\2\ Id. ] 11.
\3\ Id. ] 14.
\4\ Id. ] 13.
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I write briefly to explain why I also support Count II, which
accuses IntelliVision of misrepresenting that its software performs
with ``zero gender or racial bias'' when in fact its software exhibits
substantially different false-negative and false-positive rates across
sex and racial lines.\5\ Treating IntelliVision as having committed a
deceptive act or practice in these circumstances could lead one to
believe that the Commission is taking the position that to be
``unbiased,'' a software system must produce equal false-negative and
false-positive rates across race and sex groups.
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\5\ Id. ] 11.
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I do not read the complaint that way, and I today do not vote to
fix the meaning of ``bias.'' Statistical disparity in false-positive
and false-negative rates is not necessarily the only or best definition
of what it means for an automated system to be ``biased.'' The question
is open to philosophical and political dispute. Other definitions might
consider the discriminatory intentions of the developers, the
developers' diligence in avoiding artificial disparities while training
the automated system, or whether any statistical disparities reflect
the underlying realities the system is designed to reflect or
epistemological limitations in that underlying reality that are
impossible or uneconomical to overcome. This complaint does not choose
from among these competing definitions and considerations.
But IntelliVision used the word ``bias.'' If it intended to invoke
a specific definition of ``bias,'' it needed to say so. But it did not
say so; it instead left the resolution of this ambiguity up to
consumers. IntelliVision must therefore bear the burden of
substantiating all reasonable interpretations that consumers may have
given its claim that its software had ``zero gender or racial bias.''
\6\ A reasonable consumer could interpret ``zero gender or racial
bias'' in this context to mean equal rates of false positives and false
negatives across those lines. I therefore have reason to believe that
IntelliVision's claims were false or unsubstantiated because its
software did not have equal false-positive and false-negative rates
across those lines.
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\6\ FTC Policy Statement on Deception, 103 F.T.C. 174, 178
(1984) (``When a seller's representation conveys more than one
meaning to reasonable consumers, one of which is false, the seller
is liable for the misleading interpretation''); FTC Policy Statement
Regarding Advertising Substantiation, 104 F.T.C. 839, 840 (1984)
(``Although firms are unlikely to possess substantiation for implied
claims they do not believe the ad makes, they should generally be
aware of reasonable interpretations and will be expected to have
prior substantiation for such claims. The Commission will take care
to assure that it only challenges reasonable interpretations of
advertising claims.'').
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Pursuant to that understanding, I concur in the filing of the
complaint and settlement.
[FR Doc. 2024-28716 Filed 12-5-24; 8:45 am]
BILLING CODE 6750-01-P