A civil liberties group has threatened to take supermarket chain Tesco to court over data collection at any checkout-free stores it opens in Europe, highlighting the privacy questions raised by increasing automation.
The Irish Council for Civil Liberties (ICCL) said in a letter to Tesco chief executive Ken Murphy that it “will be obliged to take action if Tesco extends to any European Economic Area country the practice of making access to stores conditional on subscription to its loyalty scheme”.
It said that doing so “infringes the principle of data minimisation” set out in both the EU’s general data protection regulation and the UK version.
Its complaint relates to Tesco’s GetGo checkout-free store in central London, which uses technology from tech group Trigo to identify what customers have put in their baskets and charge them for the items.
Customers need to have a Tesco app to make payment and receive receipts but use of the store also requires them to sign up to the Clubcard loyalty scheme. Clubcard offers benefits to customers but also generates large amounts of data for the retailer.
“If there is not a need for you to have or use customer data then you cannot,” said Johnny Ryan, senior fellow at the ICCL. “The need has to be proportionate”.
Edward Machin from law firm Ropes Gray said that using a checkout-free store “requires some way of ensuring payment and it’s not unreasonable or unlawful in all cases for that to be done through technology or a Clubcard account”.
J Sainsbury, which has a checkout-free store in the same area, said shoppers did not have to have a Nectar loyalty card to use it.
Amazon, which has 19 Amazon Fresh checkout-free stores in the UK, requires customers to download the Amazon app while Aldi, which operates a checkout-free store in south-east London, does not have a loyalty scheme.
Adam Rose from Mishcon de Reya said the legal arguments were more complex when the customer is tracked within the store. “That type of processing . . . involves a much higher threshold to be legally compliant,” he said.
Tesco said the tracking technology uses body movements rather than facial recognition and that visual data from customers is not stored or saved.
It also said that the store, which it emphasised was a trial, “uses technology to offer a checkout-free experience, giving customers the opportunity to shop and pay without scanning a product or using a physical checkout”.
It has just one checkout-free store in an estate of more than 4,000 UK stores, but plans to open more next year with a combination of unmanned tills and checkout-free technology. Tesco has 152 stores in Ireland and 537 elsewhere in Europe.
It has previously said it would roll out such technology only when customers were comfortable with it. But like all retailers, it is facing pressure on margins from rising wages, while the cost of handling cash runs to tens of millions of pounds a year. Automation and reduced use of cash helps cut costs.