Chinese Real Estate Developers Fined for Unlawful Use of Facial Recognition

Chinese administrators are starting to crack down on the unregulated use of facial recognition technology, especially in the commercial sector. The Administration for Market Regulation for the city of Ningbo has hit three land developers with 250,000 yuan fines (approximately USD $38,500) for gathering the facial information of their customers without the proper consent.

The three offenders were local subsidiaries of China Poly Group, Sunac China Holdings, and Greenland Holdings. The fines were issued shortly after China’s annual Consumer Protection Gala, which placed a strong focus on the abuse of facial recognition tech. In that regard, there has been a growing public backlash against facial recognition in China in the past few months, due to the widespread use of facial recognition (particularly in the real estate industry) and the associated security concerns. Many facial recognition systems are entirely unprotected, leading to many data breaches and a high-profile hack of the taxation system. 

In this case, the land developers were using facial recognition to identify repeat visitors. Land developers often offer discounts to customers who are working with an agency, but that discount is void if that person initially reached out of their own accord. Facial recognition allowed the developers to spot those who brought an agent for their second trip, with a system that was accurate enough to identify people who were wearing masks.

Ningbo is located in eastern Zhejiang province, and is one of several jurisdictions (along with Sichuan province and the cities of Hangzhou, Tianjin, and Nanjing) that are currently attempting to regulate the use of facial recognition. The federal government has already drafted a new data protection law that would force businesses to obtain consent before gathering biometric information, with signs that notify the public when such systems are in use. The law would also prevent the sharing of that information, and increase the penalties for non-compliance.

Source: South China Morning Post

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May 3, 2021 – by Eric Weiss