Amazon Faces FTC Complaint Alexa Illegally Collected Kids’ Data

Leah Nylen and Matt Day, Bloomberg News

(Bloomberg) -- Federal regulators are expected to sue Amazon.com Inc. over allegations that the e-commerce giant illegally collected data on children, according to two people familiar with the case.

The Federal Trade Commission recommended filing a complaint that Amazon’s Alexa-powered speakers are collecting information about children under the age of 13 without parental consent in violation of the Children’s Online Privacy Protection Act, or COPPA, said the people, who requested anonymity to discuss a pending case. The Justice Department could file on the FTC’s behalf as soon as next month.

A group of children’s advocacy organizations in 2019 asked the FTC to investigate whether Amazon’s smart speakers violated children’s privacy rights. The Campaign for a Commercial-Free Childhood – now called Fairplay – and the Center for Digital Democracy, among other groups, alleged the company retained voice recordings indefinitely and, in some cases, held onto personal data even after users tried to delete it.

Amazon didn’t adequately verify that it had parental consent to collect data, and most of the applications on the Alexa voice assistant tailored to kids didn’t include a privacy policy at all, the complaint said.

Amazon sells a kids-focused edition of its Echo smart speaker and offers a subscription service that opens up a curated selection of apps, books and other content.

When the complaint was filed, the company said its Echo Dot Kids Edition and FreeTime, since rebranded Kids+, complied with COPPA.

Amazon and the FTC declined to comment.

The federal government can seek more than $50,000 per alleged violation of the kid’s privacy law, which has led to significant fines in previous cases.

The FTC, which enforces both antitrust and consumer protection laws, has dinged Alphabet Inc.’s YouTube and Musical.ly, the precursor company to ByteDance Ltd.’s TikTok, for children’s privacy violations. In December, the agency required closely held Epic Games, the maker of the popular Fortnite title, to pay a $275 million fine – the largest levy to date under the kids’ privacy law.

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

The law has “substantive limitations on when firms can be collecting data,” she said.

Politico earlier reported the FTC’s intent to pursue the case against Amazon.