Amazon has agreed to pay a $25 million civil penalty to settle allegations by the Federal Trade Commission (FTC) that it violated a child privacy law and deceived parents by retaining children’s voice and location data collected by its Alexa voice assistant. Additionally, Amazon will pay $5.8 million in customer refunds for privacy violations related to its Ring doorbell camera.
As part of the settlement, Amazon is required to revamp its data deletion practices and implement more stringent and transparent privacy measures. The company must delete specific data collected by Alexa, its internet-connected digital assistant used for various purposes such as weather updates, gaming, and playing music.
The FTC accused Amazon of misleading parents, retaining children’s recordings indefinitely, and disregarding parents’ requests for data deletion, which violated the Child Online Privacy Protection Act (COPPA) designed to protect children from online risks. The agency ordered Amazon to delete inactive child accounts and certain voice and geolocation data.
According to FTC Commissioner Alvaro Bedoya, Amazon retained the children’s data to improve its voice recognition algorithm, which powers the Alexa AI technology used in Echo devices and other smart speakers. The complaint from the FTC sends a message to other tech companies racing to develop similar AI datasets amid intense competition.
Amazon, which has sold over half a billion Alexa-enabled devices globally, stated that it disagreed with the FTC’s claims but agreed to the settlements to resolve the issues. The company emphasized its commitment to customer privacy and control over their experiences.
In the case of Ring, the FTC accused the home security camera subsidiary of providing insufficient security measures that allowed employees, contractors, and hackers to access consumers’ private videos. Amazon acquired Ring in 2018, and the violations mentioned by the FTC largely predate the acquisition. Ring is required to pay $5.8 million for consumer refunds under the FTC’s order.
The proposed settlement orders, including the fines and privacy requirements, await approval from federal judges. The charges against Amazon were filed by the FTC commissioners in unanimous agreement.
