SoftBank under pressure over links with 'blacklisted' Chinese facial recognition firm

Softbank is under pressure after it emerged one of its subsidiaries, which indirectly sells to prominent US enterprises, may use facial recognition systems sourced from a Chinese company blacklisted by the US government.

Japan Computer Vision Corp (JCV), which is owned by Softbank, provides facial-scanning systems to clients such as Mastercard and Visa through an intermediary third-party company. Both companies seek to use biometrics at checkout to increase security for their customers.

Reuters, however, reports that JCV utilises technology developed by SenseTime Group, a Chinese firm that was sanctioned by the US government in December for alleged links to human rights violations in the Chinese province of Xinjiang.

This has led to concerns that SoftBank will soon face difficult regulatory challenges. Although JVC remains fully compliant in Japan, the US is reportedly taking issue with the fact technology provided by one of its technology partners is indirectly being supplied to American companies.

Softbank told IT Pro that JVC develops its own systems for the Japan market, and that Visa and Mastercard are not direct customers, but are indirect customers through another company's system. A spokesperson added JVC's systems, including those supplied by SenseTime, are fully compliant with local facial recognition and privacy laws.

Softbank's planned sale of Arm to Nvidia fell through in February of this year, in part due to regulatory hurdles led by the UK Competition and Markets Authority (CMA) alongside pushback from the US Federal Trade Commission.

The use of biometric data is a hot issue, with independent research institutes such as the Ada Lovelace Foundation calling for heavy regulation of biometric technology. MPs have also argued for stricter restrictions on firms that can operate equipment such as facial recognition cameras within the UK.

Softbank also said SenseTime is a technology partner kept separate from the dealings with Mastercard and Visa, and has no access to their systems or data.

No allegations have been made that JCV itself is violating any laws or restrictions, and the firm asserts their tech is audited by a third-party cyber security company based in Israel, CYE. The firm is led by the co-founder of the Israel Defense Forces’ (IDF) Red Team, and assesses JCV’s data security and their opt-in facial recognition systems.

The main concerns stem from association with SenseTime. In the 2021 sanctions announcement, the US Treasury formally accused the company of assisting in the creation of technology to identify and categorise minorities in China.

“SenseTime 100% owns Shenzhen Sensetime Technology Co Ltd, which has developed facial recognition programmes that can determine a target’s ethnicity, with a particular focus on identifying ethnic Uyghurs.

“When applying for patent applications, Shenzhen Sensetime Technology Co Ltd has highlighted its ability to identify Uyghurs wearing beards, sunglasses, and masks,” read the US Treasury statement.

SenseTime denies these claims, and indicated to Reuters that it seeks to both strengthen its relationship with JCV. It's also established an internal ethics council to meet standards in the markets in which it operates.