Amazon slapped with $30 million fine by FTC for violating privacy using Alexa VA and Ring bell cameras

On Wednesday, Amazon reached an agreement with the Federal Trade Commission (FTC) to settle allegations that it violated a child privacy law and deceived parents regarding the storage of children’s voice and location data collected by its popular Alexa voice assistant.

As part of the settlement, Amazon agreed to pay a civil penalty of $25 million. Additionally, the company agreed to refund customers $5.8 million for privacy violations related to its Ring doorbell camera.

Problem with how data is collected and stored
The action taken against Amazon in relation to Alexa includes requirements to revamp its data deletion practices and implement more stringent and transparent privacy measures. Furthermore, the tech giant is obligated to delete specific data collected by its internet-connected digital assistant, which is widely used for various purposes such as checking the weather, playing games, and streaming music.

Samuel Levine, the consumer protection chief of the FTC, stated that Amazon’s past actions of misleading parents, retaining children’s recordings indefinitely, and disregarding parents’ requests for deletion violated the Child Online Privacy Protection Act (COPPA) and prioritized profits over privacy. COPPA, enacted in 1998, aims to protect children from online dangers.

FTC Commissioner Alvaro Bedoya emphasized that when parents requested Amazon to delete their children’s Alexa voice data, the company failed to delete all of it. Consequently, the agency instructed Amazon to delete inactive child accounts and specific voice and geolocation data.

Amazon collected children’s voice data to train smart speakers
According to Bedoya, Amazon retained the children’s data to improve its voice recognition algorithm, which powers Alexa, Echo, and other smart speakers. The FTC’s complaint serves as a warning to all technology companies racing to develop AI datasets, indicating that such practices will not be tolerated in the face of fierce competition.

FTC Commissioner Alvaro Bedoya tweeted that nothing resonates more with a parent than the sound of their child’s voice. Amazon recently announced that it has sold over 500 million Alexa-enabled devices worldwide and experienced a 35 per cent increase in service usage last year.

The case against Ring
Regarding the Ring case, the FTC alleges that Amazon’s subsidiary, responsible for home security cameras, allowed employees and contractors to access private videos of consumers. Furthermore, lax security practices enabled hackers to gain control of certain accounts.

Amazon acquired Ring, headquartered in California, in 2018, and many of the violations mentioned by the FTC occurred before the acquisition. The FTC’s order mandates Ring to pay $5.8 million for consumer refunds.

Amazon stated its disagreement with the FTC’s allegation

ns concerning both Alexa and Ring, denying any violation of the law. However, the company acknowledged that the settlements would resolve these matters.

A defiant Amazon
According to Amazon, their devices and services are designed to safeguard customers’ privacy and provide them with control over their experiences. The Seattle-based company expressed its commitment to complying with the FTC’s orders.

In addition to the fine related to Alexa, the proposed order prohibits Amazon from using deleted geolocation and voice data to create or enhance any data products. The order also requires Amazon to establish a privacy program for its utilization of geolocation information.

The proposed orders are subject to approval by federal judges.

The charges brought against Amazon in both cases were unanimously voted upon by FTC commissioners.

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