Federal regulators have announced that Amazon will pay $25 million to settle allegations that its Alexa voice assistant violated a federal law protecting children’s privacy. The Department of Justice, on behalf of the Federal Trade Commission (FTC), filed a lawsuit alleging that Amazon did not delete children’s recordings and location information, in some cases before mid-2019 by retaining transcripts that parents specifically ordered Alexa to delete.
The Children’s Online Privacy Protection Act (COPPA), a law of 1998, was recently applied against other popular technology companies, including the maker of Fortnite, Epic Games, and YouTube. By recording children and using transcripts of those recordings to improve its product, even after takedown requests, the US government alleges that Amazon violated COPPA.
More than 800,000 children under the age of 13 have their own Alexa profiles. The voice assistant is especially popular with young children who cannot read but can access information and entertainment by speaking to the device. The FTC has also fined Amazon for Ring, its home surveillance company best known for its doorbell camera. Regulators say the company illegally allowed employees and contractors to view private videos from customers’ homes and are fining the company an additional $5.8 million.
“At Amazon, we take our responsibilities to our customers and their families very seriously,” said Amazon spokeswoman Parmita Choudhury in a statement. “Our devices and services are designed to protect customers’ privacy and give them control over their experience. While we disagree with the FTC’s assertions regarding Alexa and Ring, and deny violating the law, these settlements leave these issues behind.”
Choudhury said Amazon agreed to “remove profiles of children who have been inactive for more than 18 months” as part of the settlement and worked with the FTC to expand a compliant program called Amazon Kids. Regarding Ring, he said Amazon addressed privacy concerns “before the FTC began its investigation.”
The action against Amazon had the support of FTC commissioners from both parties, including former Republican commissioner Christine Wilson, who voted on the complaint before leaving the agency earlier this year. Politicians from both parties have shown increasing interest in protecting children online, calling for updating COPPA for the modern Internet and questioning technology executives about their safeguards for minors.
In the absence of action in Washington, state legislatures have recently become more active in passing laws aimed at keeping children safe online. California last year passed the Age-Appropriate Design Code, which would require companies to consider the safety of children in the design of their products. Netchoice, an industry group that counts Amazon as a member, filed a lawsuit to stop the law from taking effect. A patchwork of state laws governing children’s time online is emerging, as Utah and Arkansas adopt laws requiring social networking sites to verify users’ ages.
The $25 million fine is significantly less than penalties other tech companies have paid federal regulators for privacy violations against children but is representative of the FTC’s broad scrutiny of Amazon’s expanding businesses. The FTC has been investigating Amazon for possible violations of US antitrust laws in a far-reaching case that opened under the Trump administration in 2019.
The recent launch of ChatGPT has sparked an AI arms race on Silicon Valley. Federal regulators said that this case against Amazon is intended to send a signal to all tech companies competing to use big data to refine AI models. “Machine learning is no excuse for breaking the law,” said Commissioner Álvaro M. Bedoya in a statement joined by FTC Chairman Lina Khan (D) and Commissioner Rebecca Kelly Slaughter. “Company claims that data should be retained indefinitely to improve algorithms do not override legal prohibitions on indefinite data retention.”
The kernel, federal regulators’ actions against Amazon are indicative of mounting Washington scrutiny over giant electronic commerce firms like it operating amid concerns about privacy protection for minors and antitrust issues. The $25 million fine is a signal to all tech companies competing to use big data to refine AI models that machine learning is no excuse for breaking the law. It also highlights the importance of updating COPPA for the modern Internet and questioning technology executives about their safeguards for minors.