Incident 212: XPeng Motors Fined For Illegal Collection of Consumers’ Faces Using Facial Recognition Cameras

Description: The Chinese electric vehicle (EV) firm XPeng Motors was fined by local market regulators for illegally collecting in-store customers’ facial images without their consent for six months.
Alleged: Unknown developed an AI system deployed by XPeng Motors, which harmed XPeng Motors customers.

Suggested citation format

AIAAIC. (2021-01-01) Incident Number 212. in Lam, K. (ed.) Artificial Intelligence Incident Database. Responsible AI Collaborative.

Incident Stats

Incident ID
212
Report Count
4
Incident Date
2021-01-01
Editors
Khoa Lam

Reports Timeline

Tools

New ReportNew ReportDiscoverDiscover

Incidents Reports

Recently, Xpeng Motors was fined 100,000 yuan ($15,717) by Xuhui District Market Supervision Administration of Shanghai for using camera equipment with face recognition functionality to collect 431,623 face photos without the consent of users.

According to the administrative penalty decision, in 2019, Xpeng signed the Framework Contract of Xpeng Store Passenger Flow Monitoring Project with a company, which stipulated that Xpeng would purchase store passenger flow monitoring project services from the company from March 1, 2019 onwards, in addition to purchasing its face recognition camera equipment and install them in its stores to collect consumers’ facial recognition data.

Xpeng Motors has purchased 22 sets of the camera equipment with facial recognition functionality, all of which were installed in its stores, including 5 direct stores and 2 franchise stores. From January to June 2021, the devices had collected and uploaded 431,623 face photos in all. However, the consent to collect the facial recognition data was never obtained from consumers, nor did XPeng explicitly inform the consumers about the purpose of data collection and use.

Xpeng commented on the matter on Tuesday, “The stores in Shanghai hoped to improve the reception process and better serve the customers who came to the store by collecting and analyzing the data of store passenger flow. However, due to unfamiliarity with relevant legal provisions, they mistakenly purchased and used the products of third-party suppliers that violated relevant legal provisions.”

In addition, Xpeng Motors said that its Shanghai stores had already removed all the collection equipment through their own initiative prior to the inspection by the Shanghai Municipal Supervision Bureau on March 18. Further, the data collected and analyzed by third-party software providers has already been deleted. Xpeng Motors says it has not disclosed nor illegally used personal information, and has only used non-personal digital data such as passenger flow as a reference for its operations.

Xpeng Motors Fined for Collecting Face Photos

Chinese electric vehicle (EV) firm XPeng Motors on Tuesday apologized for the illegal collection of 430,000 facial images of visitors to its stores over a six-month period, after the company was fined by market regulators for the illegal behavior and prompted harsh criticisms on Chinese social media, where many called for tougher regulatory actions and full rectification.

In a statement sent to the Global Times, the company said that all data involved had been deleted without leaks or the illegal use of personal information.

The statement came after its Shanghai-based company was fined 100,000 yuan ($15,716.6) by local market regulators for illegal collection of over 430,000 photos of consumers' faces without their consent from January to June this year.

The issue topped search trends on China's social media Sino Weibo on Tuesday. Many netizens expressed anger about the company's illegal performance, urging authorities to intensify crackdowns on companies that illegally collect private information.

According to a notice for the penalty, the company purchased 22 cameras with facial recognition functions and installed them in its stores, so as to count the number of people entering the stores and analyze the proportion of people by gender and age.

The firm did not inform consumers of the data collection and its use, nor did it ask for their permission, which violated the Consumer Rights Protection Law, analysts said.

Xpeng explained in the statement that the store in Shanghai wanted to improve the reception service by collecting and analyzing data on consumers, but due to unfamiliarity with relevant laws, it mistakenly purchased and used products from a third-party supplier that violated the law.

The related data, collected and analyzed by a third-party provider, has been completely deleted without leakage or illegal use of personal information, the company said, adding that the Shanghai stores removed all the collection equipment on March 18, before the inspection of the local market regulator.

Xpeng is not the first company to be punished for illegally collecting customers' facial information in China. On March 15, the World Consumer Rights Day, China Media Group (CMG) reported that more than 20 stores, including Kohler and BMW 4S, had installed cameras with facial recognition functions to collect facial data without consumers' consent.

"Facial data is highly sensitive personal information. Once leaked, it will cause great harm to personal and property security," Zhao Zhanling, a legal counsel at the Beijing-based Internet Society of China, told the Global Times on Tuesday.

Zhao said that before collecting such data, the merchant should ask for consumers' permission and inform them of the use of the data. The procedure of Xpeng violated consumers' right to know as well as their privacy, he said.

In July, the Supreme People's Court issued a ruling on facial recognition, stipulating that the illegal use of such technology for facial verification, identification or analysis in public places, including hotels and shopping malls, should be deemed to be an infringement of the personal rights and interests of individuals.

Zhao called on the company to carry out self-inspection in order to avoid similar illegal activities in its other stores, as well as strictly complying with national regulations on the protection of consumers' personal information to ensure their legitimate rights and interests.

Xpeng apologizes for illegal collection of facial images after penalty

BEIJING, December 14 (TMTPOST) - Chinese EV startup Xpeng Motors has been fined 1000,000 yuan (US$16,000) by the market regulation authority in Shanghai for collecting facial images of customers without consent.

Xpeng Motors reportedly collected 431,623 images of its customers by using surveillance cameras with facial recognition functions without prior consent from the customers.

“Our outlets in Shanghai wanted to collect and analyze the data of customer traffic to optimize our operation and better serve the customers,” Xpeng Motors told TMTPost. “Because of the lack of familiarity with the law, we made wrong judgments and procured services that violate relevant laws and regulations from a third-party supplier (Ulucu).”

Xpeng Motors said that they had already conducted internal evaluations and removed all data-collecting devices before Shanghai Market Regulation Department’s inspection on March 18. Data that were collected by the software from a third-party supplier and relevant data analyses had all been deleted, the company said. According to Xpeng Motors, the company did not leak any personal data of its customers nor use them illegally. The company only used the customer traffic data as an indicator of its business operation.

Xpeng Motors stated that it agreed to the administrative penalty and would reflect on the matter.

The country’s Personal Data Protection Law went into effect in November 2021, specifying ground rules for data collection, usage and storage. The law also lays out requirements for companies outside of China that need to process data from the country, including passing a security assessment conducted by state authorities.

China’s Personal Data Protection Law clearly stipulates that data processors must acquire consent from individuals whose data would be collected before collecting data. In addition, data processors must inform and explain to individuals whose data were collected in clear and simple language as to how their personal data would be used. The legal clauses are easily accessible through a simple search on the Internet.

Personal data protection is a sensitive matter in China. Illegal collection of data has been prevalent in the country. Users’ information and data are often collected without consent and are sold for profits.

In a survey conducted by the Institute of Law of the Chinese Academy of Social Sciences, 42.5% of the respondents said that they had encountered situations where their personal data were misused.

Xpeng Motors Fined for Collecting Facial Images Without Consent

NEW DELHI: Chinese electric vehicle (EV) firm XPeng Motors on Tuesday apologised for the illegal collection of 430,000 facial images of visitors to its stores over a six-month period, after the company was fined by market regulators for the illegal behaviour and prompted harsh criticisms on Chinese social media, Global Times reported.

In a statement sent to the Global Times, the company said that all data involved had been deleted without leaks or the illegal use of personal information.

The statement came after its Shanghai-based company was fined 100,000 yuan ($15,716.6) by local market regulators for illegal collection of over 430,000 photos of consumers' faces without their consent from January to June this year.

The issue topped search trends on China's social media Sino Weibo on Tuesday. Many netizens expressed anger about the company's illegal performance, urging authorities to intensify crackdowns on companies that illegally collect private information, the report said.

According to a notice for the penalty, the company purchased 22 cameras with facial recognition functions and installed them in its stores, so as to count the number of people entering the stores and analyze the proportion of people by gender and age.

The firm did not inform consumers of the data collection and its use, nor did it ask for their permission, which violated the Consumer Rights Protection Law, analysts said.

Xpeng is not the first company to be punished for illegally collecting customers' facial information in China. On March 15, the World Consumer Rights Day, China Media Group (CMG) reported that more than 20 stores, including Kohler and BMW 4S, had installed cameras with facial recognition functions to collect facial data without consumers' consent.

"Facial data is highly sensitive personal information. Once leaked, it will cause great harm to personal and property security," Zhao Zhanling, a legal counsel at the Beijing-based Internet Society of China, told the Global Times on Tuesday.

China fines EV firm for illegal collection of facial images of visitors