Amazon faces a USD 31 million penalty for privacy violations

Key Takeaways: 

• Amazon has agreed to pay a USD 25 million civil penalty to settle allegations by the Federal Trade Commission (FTC) that it violated child privacy laws by keeping kids' voice and location data recorded by its Alexa voice assistant.
  
  
• The settlement also requires Amazon to pay USD 5.8 million in customer refunds for privacy violations involving its Ring doorbell camera.
  
  
• As part of the settlement, Amazon is ordered to overhaul its data deletion practices and implement stricter and more transparent privacy measures. It must delete certain data collected by Alexa and comply with the Child Online Privacy Protection Act (COPPA).
  
  
• The FTC found that Amazon had misled parents, kept children's recordings indefinitely, and disregarded deletion requests. The company had retained the data to improve its voice recognition algorithm for Alexa.
  
  
• The FTC's actions aim to send a message to all tech companies about the importance of protecting children's privacy and highlight the need for responsible data handling and privacy practices in the development of artificial intelligence datasets.

Dive Insight: 

Amazon has agreed to pay a USD 25 million civil penalty to settle allegations by the Federal Trade Commission (FTC) that it violated child privacy laws. The company was accused of keeping children's voice and location data recorded by its Alexa voice assistant for an extended period without consent or knowledge from parents. In a separate case, Amazon will also pay USD 5.8 million in customer refunds for privacy violations related to its Ring doorbell camera.

As part of the settlement, Amazon is required to overhaul its data deletion practices and implement stricter privacy measures. This includes deleting specific data collected by its internet-connected digital assistant, Alexa, which is used for a wide range of tasks. The FTC highlighted that Amazon's actions violated the Child Online Privacy Protection Act (COPPA) and emphasized the company's history of misleading parents and disregarding deletion requests.

FTC Commissioner Alvaro Bedoya revealed that Amazon retained children's data for the purpose of refining its voice recognition algorithm, which powers Alexa, Echo devices, and other smart speakers. This insight offers an explanation for the company's decision to keep the recordings, as it aimed to enhance the accuracy and capabilities of its artificial intelligence technology. However, the FTC's actions send a clear message to the tech industry, emphasizing the need for responsible data handling and privacy practices, particularly when it involves children.

Despite Amazon's disagreement with the FTC's claims and denial of violating the law, the company has accepted the settlements to put these matters behind them. Amazon stated that its devices and services are built to protect customer privacy and provide control over the user experience. The proposed orders, which prohibit the use of deleted geolocation and voice information for data product improvements, and the requirement to establish a privacy program, are subject to approval by federal judges. The unanimous vote by FTC commissioners highlights the seriousness of the charges brought against Amazon in both the Alexa and Ring cases.