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On Wednesday, Amazon reached an agreement to pay a $25 million civil penalty to resolve allegations made by the Federal Trade Commission (FTC). The company was accused of violating a child privacy law and misleading parents by retaining children’s voice and location data collected by its widely used Alexa voice assistant for an extended period of time.
In a separate incident, Amazon has also agreed to pay $5.8 million in customer refunds to address alleged privacy violations related to its doorbell camera product, Ring.
As part of the action taken against Amazon concerning Alexa, the company has been directed to revamp its data deletion practices and implement more stringent and transparent privacy measures. Furthermore, the tech giant is required to delete specific data collected by its internet-connected digital assistant, Alexa, which serves a multitude of purposes ranging from weather updates and gaming to music playback.
Samuel Levine, the consumer protection chief at the Federal Trade Commission (FTC), stated that Amazon’s actions, which involved misleading parents, retaining children’s recordings indefinitely, and disregarding parents’ requests for deletion, violated the Child Online Privacy Protection Act (COPPA). In a statement, Levine emphasized that these actions compromised privacy in favor of financial gains. COPPA, enacted in 1998, aims to protect children from potential online harms.
According to FTC Commissioner Alvaro Bedoya’s statement, Amazon failed to fully delete the Alexa voice data of children as requested by parents. Despite parental requests for data deletion, the company did not completely comply with their wishes.
In response to the situation, the agency has mandated that Amazon delete inactive child accounts and specific voice and geolocation data. It was revealed by Bedoya that Amazon retained the children’s data to enhance its voice recognition algorithm, the underlying artificial intelligence technology behind Alexa, which powers devices like Echo and other smart speakers. Bedoya further stated that the FTC’s complaint serves as a message to all technology companies engaged in fierce competition to develop AI datasets, cautioning them against similar practices.
In a tweet, Bedoya, a father of two young children, expressed the profound significance of a parent hearing their child’s voice. Amazon recently reported that it has sold over half a billion Alexa-enabled devices worldwide, with service usage increasing by 35% last year. Regarding the Ring case, the FTC alleged that Amazon’s home security camera subsidiary allowed employees and contractors access to private consumer videos. The FTC also stated that lax security practices facilitated hackers in gaining control over certain accounts.
After acquiring California-based company Ring in 2018, Amazon has faced allegations of violations that mostly occurred prior to the acquisition, as stated by the FTC. As part of the FTC’s order, Ring is obligated to pay $5.8 million, which will be utilized for issuing refunds to affected consumers. Amazon expressed disagreement with the FTC’s claims regarding both Alexa and Ring, denying any violation of the law. However, the company mentioned that the settlements allow them to move forward and put these matters in the past.
In response to the situation, the Seattle-based company stated, “Our devices and services are designed to safeguard customers’ privacy and provide them with control over their experience.” Apart from the fine associated with the Alexa case, the proposed order mandates that Amazon refrain from utilizing deleted geolocation and voice data for the development or enhancement of any data product. Additionally, the order compels Amazon to establish a privacy program specifically addressing the company’s use of geolocation information.
