Security and Privacy Win: Amazon to Pay $31m After FTC’s Allegation

Amazon has agreed to pay nearly $31 million to the Federal Trade Commission (FTC) to settle claims related to its Alexa voice assistant and Ring home security business. The settlement includes a $25 million penalty for violating the US Children’s Online Privacy Protection Act Rule (COPPA Rule) and deceiving Alexa users about data deletion practices.

Big tech puts data collection ahead of privacy:

Meta fined record $1.3 billion and ordered to stop sending European user data to US, including medical records of patients in the UK.

The FTC is also probing Amazon's $1.7 billion deal to buy iRobot

Ring spies it's customers … pic.twitter.com/eeyEwAilWQ

— cgennari76 (@cgennari76) June 1, 2023

What is it all about?

The Department of Justice (DoJ) filed a complaint on behalf of the FTC, stating that Amazon misled users by assuring them they could delete Alexa voice recordings and geolocation information. However, Amazon allegedly kept some of this data for an extended period and used it without permission to improve the Alexa algorithm.

“Amazon’s history of misleading parents, keeping children’s recordings indefinitely, and flouting parents’ deletion requests violated COPPA and sacrificed privacy for profits,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “COPPA does not allow companies to keep children’s data forever for any reason, and certainly not to train their algorithms.”

Also, Amazon’s Ring business, acquired in 2018, will pay $5.8 million to settle charges of compromising consumer privacy and failing to implement proper security measures. The funds will be used to provide refunds to affected consumers.

What did they do?

According to the FTC complaint, Ring deceived customers by 

• granting employees and contractors access to customers’ videos and using those videos to train algorithms without consent. 
• It was also alleged that an employee had viewed numerous video recordings from female users’ intimate home spaces. 
• The ring was accused of inadequate account security measures, which led to unauthorized access and potential extortion of approximately 55,000 US customers.

What’s decided?

As part of the settlement, Amazon must 

• delete inactive child accounts and specific Alexa voice recordings and geolocation data.
• The company is also prohibited from using this data for algorithm training. 
• The ring is obligated to delete unlawfully reviewed data, models, and algorithms derived from videos, and 
• to implement a privacy and security program with enhanced safeguards.

Do they agree? 

Amazon has disagreed with the FTC’s claims regarding Ring and Alexa, asserting that it adheres to privacy protections and customer controls. The company emphasized its compliance efforts with COPPA and its collaboration with the FTC. Amazon clarified that it would minorly adjust its practices and delete inactive child profiles. Amazon claimed to have addressed the issues before the FTC’s investigation regarding Ring.

Source: FTC

Conclusion: The privacy win

After building their market, companies neglect privacy issues and feel others don’t do it too. But the FTC has proved that they have paid attention to big names like Amazon. Keeping your goodwill in today’s digital space is a question for strategic planning. Either you are security stringent, or you are out of the game!