Amazon to pay $30M to settle the FTC’s Alexa, Ring complaints

Amazon is about to pay the piper, with the e-tailing giant agreeing to pay more than $30 million to settle a pair of U.S. Federal Trade Commission complaints over its handling of data from Alexa kid profiles as well as its sharing of Ring video recordings with third parties.

In a pair of filings released Wednesday, Amazon has agreed to fork over $5.8 million to settle the FTC’s Ring complaints, while the Alexa settlement will cost Amazon a cool $25 million.

As CNBC reports, the Alexa settlement concerns the FTC’s accusations that Amazon illegally gathered information from the Alexa profiles of children, including voice recordings and other data.

The Ring settlement, meanwhile, calls for Ring to do a better job of disclosing to its users the information it shares with company employees and third-party contractors, according to Reuters.

For its part, Amazon fired off a pair of responses to the twin FTC settlements, pledging that it had–in both cases–already implemented policies to protect customer privacy, while also denying that it broke the law.

But while Amazon took issue with the FTC’s Alexa and Ring complaints, the company chose to settle, adding (in the case of the Alexa complaint) that “this settlement puts the matter behind us.”

In its Alexa complaint, the FTC alleged that Amazon violated COPPA–the Children’s Online Privacy Protection Act–by storing the data of children, including voice recordings, that had been gathered in Alexa profiles without proper consent.

Amazon’s handling of the data of children would naturally be a cause for concern, particularly given kids versions of Amazon’s Echo Dot speakers and Echo Show smart displays.

As part of the settlement, Amazon must wipe inactive child accounts, and it is forbidden from using any data collected from kids to tweak its algorithms, according to the CNBC report.

Amazon pushed back in its response to the FTC’s Alexa complaints, saying that it “work[s] hard to protect children’s privacy” and that it has “built robust privacy protections into our childrens’ products and services.” 

Amazon also denied that it had violated COPPA, noting that it had “collaborated directly with the FTC” about the act before launching its Amazon Kids service on Alexa.

In its second complaint, the FTC slammed Amazon-owned Ring for its “dangerously overbroad access and lax attitude toward privacy and security,” which allowed “employees and third-party contractors…to view, download, and transfer customers’ sensitive video data for their own purposes.”

In a response to the settlement, Ring argued that it had “promptly” addressed such privacy issues prior to the FTC investigation.

The Ring statement also claims the FTC “mischaracterizes our security practices” and “ignores the many protections we have in place for our customers.”

Ring has long been dogged by criticism over its handling of user videos, including how it shared them with third-party contractors as well as law-enforcement officials. 

Those complaints came to a head in late 2019, as reports emerged of hackers managing to crack Ring’s security and spy (or even taunt) unsuspecting users, while the Electronic Frontier Foundation accused Ring of using third-party trackers in its Android app. 

Ring has also been criticized for handing over video footage to law enforcement, sometimes without a warrant.

For its part, Ring says it has already taken steps to address the FTC’s concerns. In 2020, Ring began rolling out two-factor authentication to help prevent hackers from breaking into the accounts of Ring users.

A year later, Ring began to implement end-to-end encryption, allowing users who enable the feature to ensure that they’re the only ones with access to their stored videos.

Finally, Ring noted that it now has “strong policies and controls” that prevent its employees and third parties from viewing, accessing, or controlling Ring livestreams.