By Alex Mitchell 

Retail workers and shoppers are pitted against each other in a feud over surveillance technology.

Kmart breached privacy laws by collecting personal and sensitive information through a facial-recognition technology system designed to tackle refund fraud between 2020 and 2022.

Privacy Commissioner Carly Kind knocked back Kmart’s argument that it did not need to obtain customer consent due to a legal loophole allowing it to collect the information to tackle unlawful activity.

Macquarie University technology and intellectual property law expert Rita Matulionyte said the Kmart decision, along with a similar finding against Bunnings in 2024, had set a “very clear boundary” about face-scanning.

Without obtaining customer consent, retailers needed a “very serious” reason to use facial-recognition technology and the commissioner was yet to provide any examples of what that would be, Dr Matulionyte said.

“There are no written rules on how exactly a store gets consent, but what is clear is just hanging a sign on the wall saying ‘Kmart is using facial-recognition technology’, is not sufficient,” she told AAP.

“I cannot imagine how shops could get effective consent from all people that enter their stores, and without consent, if we follow recent decisions, they cannot use that technology.”

Kmart used the technology at 28 stores to capture every person who entered and again when they lined up at a returns counter.

The commissioner found the retailer could not have reasonably believed that justified the impact on individual privacy.

Australian Retailers Association chief executive Chris Rodwell said 800,000 retail crime incidents in 2024, including a quarter involving violence or intimidation, showed the technology should be part of protecting frontline workers.

“No one should have to put their life on the line to go to work – yet too many of Australia’s 1.4 million retail workers, especially younger staff, are being subjected to violence and abuse,” he said.

“We owe it to them to explore every responsible solution, including facial recognition technology.”

But Monash University surveillance expert Mark Andrejevic noted the retail sector seemingly used the technology to address a problem of its creation.

“In seeking to cut back on labour costs, it implemented automated checkout systems that resulted in increased theft and fraud, and then sought to implement increasingly sophisticated surveillance systems,” he told AAP.

“Not that they wouldn’t use the technology in any case – we are entering a world in which the promise of total security is underwritten by the fantasy of universal surveillance.”

Consumer advocate Choice said the Kmart ruling highlighted a need for “fit-for-purpose” laws.

“Australia’s current privacy laws are confusing and difficult to enforce … without proper and clear regulation of facial-recognition technology, there will continue to be the potential for harm,” Choice investigative journalist Jarni Blakkarly said.

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