– By Manya Koetse, with contributions from Bobby Fung
A recent news report by Southern Metropolis Daily exposes how more and more real estate offices in China are working with facial recognition technologies to collect personal information about their prospective clients.
This is not the first time that the widespread use of facial-recognition techniques in the real estate industry receives attention in Chinese media. In 2019, some blogs already raised concerns over the use of such techniques and the negative impact it could have on homebuyers.
But why would the real estate industry benefit from buying expensive face recognition systems?
One reason is that these AI techniques could earn those within the industry a lot of money while reducing time-consuming conflicts over commission fees.
Using facial recognition within the real estate industry solves existing problems regarding the practice of commissions and splits in compensation, as the techniques can register when, where, and how often a certain client visited, and through which channels the eventual property purchase was made.
Besides the fact that the registration of biometric information violates the privacy of visitors, it could also mean they, as homebuyers, are losing out on big money. First-time visitors, not yet registered by the smart facial recognition cameras, can get much higher discounts.
The report by Southern Metropolis Daily claims that homebuyers could end up paying up to 300,000 yuan ($45,560) more when buying property if their face was previously recorded.
This is, among others, because agencies make a distinction between homebuyers who first come to view a property following a real estate agent’s own marketing campaign (a ‘natural visitor’ 自然到访客户) and those who have come through an intermediary (‘渠道客户’). In the latter case, the company also has to pay a commission fee to the intermediary.
This system has led to some potential homebuyers wearing helmets when visiting a real estate agency. Images of a certain ‘Brother Helmet’ (头盔哥) viewing property previously attracted attention online.
One of the companies that is mentioned by Southern Metropolis Daily as providing this kind of smart camera systems to companies is the Shenzhen-based Myunke (Mingyuan Yunke 明源云客), an internet company focusing on the “intelligent transformation and upgrading” of real estate marketing.
On Weibo, dozens of commenters suggest that the use of these techniques in China’s real estate industry is already widespread, with some sharing their own experiences as homebuyers and others saying: “I work in this industry, and it’s true.”
“Where’s our privacy?! This is too scary!”, others write, with some saying that the root of the problem lies in China’s “overly lax privacy protection.”
The ubiquity of commercial use of facial recognition has been attracting more attention recently amid rising privacy concerns.
One example is the use of built-in smart cameras by digital advertisement billboards, which measure customers’ reactions to advertisements. These digital billboard record, for example, if people look at the advertisement, how long they stay interested, and if they are male or female.
Earlier this week, a court in Hangzhou ordered a local wildlife park to delete the facial recognition data of one of its patrons, saying it was “unnecessary” and “lacked legitimacy.” An associate law professor at Zhejiang Sci-tech University named Guo Bing sued the safari park in 2019 for using mandatory facial recognition systems to register him and his wife as park visitors.
As reported by Sixth Tone, Guo decided to file this lawsuit on the grounds that the park had violated China’s consumer rights protection law by collecting sensitive personal information without the permission of its patrons.
In light of the heightened concerns around privacy and commercial use of facial recognition, a draft law to ban facial recognition systems in residential communities was recently submitted to the local legislation department in Hangzhou. This move may signal a stricter overview or even ban of mandatory collection of facial scans in residential areas.
Whether or not the use of facial recognition systems in real estate sales will be curbed any time soon is unclear. Some experts have pointed out, however, that the necessity and legitimacy of employing such techniques – which only protect the interests of the company and not the interest nor rights of the clients – is highly questionable.
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