Amazon.com Inc. is staring at a lawsuit as United States regulators investigate the gigantic e-commerce company for collecting and storing data on children illegally, according to a Bloomberg report citing two people privy to the matter.
The Federal Trade Commission (FTC) has advised filing a complaint regarding allegations of Amazon’s Alexa-powered speakers gathering data on children below the age of 13 without getting parental consent, thereby violating the Children’s Online Privacy Protection Act, commonly referred to as COPPA based on the statements of people familiar with the matter but requested to remain anonymous.
The Justice Department Could File The Case In April
Investigation into Amazon’s Alexa-powered speakers alleged the collection of kids’ data may have started in 2019 when a children’s advocacy organization made a formal request to the FTC to look into the matter and find out if children’s privacy rights were being violated.
Several organizations including Fairplay and the Center for Digital Democracy accused the company of keeping voice recordings for an indefinite period and retaining personal data even when users attempted to delete it.
The organizations said at the time that Amazon was not clear as to whether it had parental consent to collect and store data.
At the same time, applications on the Alexa voice assistant, those particularly designed for children did not have a privacy policy in place, according to the complaint.
For example, the e-commerce company offers a kid’s version of the Echo smart speaker powered by a subscription service able to unlock several apps, books, and other content for children’s consumption.
According to legal experts, the FTC could sue Amazon for more than $50,000 for each of the alleged violations of COPPA, which in the past, have culminated in substantial fines paid to the federal government.
Alphabet Inc.’s YouTube and Musical.ly, the parent company to ByteDance Ltd.’s TikTok, have all faced legal action from the FTC for violating children’s privacy rights.
The developer of the widely known Fortnite, Epic Games resolved to pay the regulator a whopping $275 million fine in December—in what was the largest levy ever paid to date for disregarding kid’s privacy law.
Lina Khan, the FTC chair while speaking during a conference in Washington last Friday reckoned that the law “prohibits firms from conditioning access to certain services on an endless collection of data.”
The constitution has “substantive limitations on when firms can be collecting data,” she added.
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