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[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.

[[Page 96985]]

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
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