Amazon settles kids' privacy case with FTC and DOJ for $25M
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Amazon (NASDAQ:AMZN) settled a children's privacy case with the Federal Trade Commission and the Department of Justice on Wednesday. The settlement terms will require Amazon (AMZN) to pay $25M and overhaul its deletion practices and implement stringent privacy safeguards to settle specific charges regarding violations of the Childrenâs Online Privacy Protection Act Rule and allegations it deceived parents and users of the Alexa voice assistant service about its data deletion practices.
According to a complaint filed by the Department of Justice on behalf of the FTC, Amazon (AMZN) prevented parents from exercising their deletion rights under the COPPA Rule, kept sensitive voice and geolocation data for years, and used it for its own purposes, while putting data at risk of harm from unnecessary access.
"Amazonâs history of misleading parents, keeping childrenâs recordings indefinitely, and flouting parentsâ deletion requests violated COPPA and sacrificed privacy for profits," FTC Bureau of Consumer Protection Director Samuel Levine. "COPPA does not allow companies to keep childrenâs data forever for any reason, and certainly not to train their algorithms," he added.
It was a busy day for Amazon (AMZN) on the regulatory front, with the FTC updating earlier that the Seattle e-commerce giant agreed to settle claims that its Ring doorbell unit allegedly spied on users. Amazon (AMZN) agreed to pay $5.8M to the FTC to settle the allegations.
Amazon's statement on the settlement provided to Seeking Alpha: "At Amazon, we take our responsibilities to our customers and their families very seriously. We built Alexa with strong privacy protections and customer controls, designed Amazon Kids to comply with COPPA, and collaborated with the FTC before expanding Amazon Kids to include Alexa. While we disagree with the FTCâs claims and deny violating the law, this settlement puts the matter behind us. As part of the settlement, we agreed to make a small modification to our already strong practices, and will remove child profiles that have been inactive for more than 18 months unless a parent or guardian chooses to keep them."
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The article was updated to add Amazon's response.