In a significant privacy settlement, Amazon.com has been penalized by the Federal Trade Commission (FTC) for alleged surveillance violations involving Ring, its doorbell camera subsidiary, and controversial data handling linked to its Alexa service. This landmark action was announced Wednesday in federal court filings, leading to penalties amounting to $30.8 million.
According to the FTC's disclosure, a former Ring employee was found spying on unsuspecting female consumers through bedroom and bathroom cameras over several months in 2017. This revelation triggered a $5.8 million settlement regarding the infringement of privacy.
Simultaneously, Amazon has been hit with a $25 million fine for allegedly failing to respect children's privacy rights. The FTC alleged that the company failed to comply with parents' requests to erase Alexa recordings, retaining them beyond a necessary timeframe. This settlement was separately filed in a federal court in Seattle.
These actions represent the FTC's ongoing commitment to safeguarding consumer privacy against data collection practices that are deemed to prioritize profit over privacy within the Big Tech industry.
Amazon's acquisition of iRobot Corp for $1.7 billion, aimed at reinforcing its smart home device portfolio, is also being examined by the FTC alongside a distinct antitrust investigation into the company's practices.
Despite contesting the FTC's accusations, Amazon committed to making amendments to its operations. In a statement, Amazon said, "Though we disagree with the FTC's allegations concerning Alexa and Ring and reject any breach of law, these settlements allow us to move past these issues."
The FTC criticized Ring for its lax attitude towards privacy and security, granting employees unregulated access to customers' sensitive video data. This lack of oversight enabled staff and third-party contractors to view, download, and distribute customers' sensitive footage.
One incident revealed that a Ring employee secretly accessed and monitored video footage from at least 81 female customers and Ring employees, undetected for several months. Upon discovery, the employee was ultimately dismissed.
As part of the FTC settlement, which is effective for 20 years, Ring is required to disclose the extent of access it and its contractors have to customer data. By February 2019, Ring updated its policies to ensure that private customer videos could only be accessed by Ring employees or contractors with customer consent.
FTC Commissioner Alvaro Bedoya emphasized that this settlement serves as a clear warning to tech companies, stating, "This is a very clear signal to them," and stressing that data collection does not justify breaking the law.
Despite the seemingly hefty penalties, the $30.8 million in fines is relatively minor compared to Amazon's first-quarter profit of $3.2 billion.
In its Washington state-filed complaint against Amazon.com, the FTC accused the tech giant of breaking rules designed to safeguard children's privacy and misleading consumers using Alexa. The FTC stated, "The unlawfully retained voice recordings provided Amazon with a valuable database for training the Alexa algorithm to understand children, benefiting its bottom line at the expense of children's privacy."
