Amazon says facing FTC complaint over illegally collected children’s data

Federal regulators should sue Amazon over allegations that the e-commerce giant unlawfully collected data on children, according to two people familiar with the matter.

The Federal Trade Commission has recommended filing a complaint that Amazon’s Alexa-powered speakers collect information from children under 13 without parental consent, in violation of privacy law Children’s Online, or COPPA, said the people, who requested anonymity to discuss an ongoing case. The Justice Department could file on behalf of the FTC as early as next month.

In 2019, a group of children’s advocacy organizations asked the FTC to investigate whether Amazon’s smart speakers violate children’s privacy rights. The Campaign for a Commercial-Free Childhood – now called Fairplay – and the Center for Digital Democracy, among other groups, have alleged that the company retains voice recordings indefinitely and, in some cases, retains personal data even after users attempt to delete them.

Amazon failed to adequately verify that it had parental consent to collect data, and most child-friendly Alexa voice assistant apps did not include a privacy policy, according to the complaint.

Amazon sells a kids’ edition of its Echo smart speaker and offers a subscription service that unlocks a curated selection of apps, books and other content.

When the lawsuit was filed, the company said its Echo Dot Kids and FreeTime editions, since rebranded as Kids+, were COPPA compliant.

Amazon and the FTC declined to comment.

The federal government can claim more than $50,000 (approximately Rs. 41,09,000) per alleged violation of the Child’s Privacy Protection Act, which has resulted in significant fines in previous cases.

The FTC, which enforces both antitrust and consumer protection laws, has slapped Alphabet’s YouTube and Musical.ly, ByteDance’s TikTok precursor company, for violating children’s privacy. In December, the agency demanded that Epic Games, the creator of the popular Fortnite title, tightly held, pay a fine of $275 million (about Rs 2,300 crore) – the largest levy to date under of the Children’s Privacy Act.

Speaking at a conference in Washington on Friday, FTC Chair Lina Khan said the law “prohibits companies from conditioning access to certain services on endless data collection.”

The law has “substantial limits on when companies can collect data,” she said.

Politico previously signaled the FTC’s intention to pursue the case against Amazon.

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