Amazon to pay over million in FTC settlements over Ring, Alexa privacy violations

Amazon to pay over $30 million in FTC settlements over Ring, Alexa privacy violations

Published

2 years ago

June 1, 2023

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Smith Collection/Gado | Archive Photos | Getty Images

Amazon will pay the Federal Trade Commission more than $30 million to settle allegations of privacy lapses in its Alexa and Ring divisions, according to filings on Wednesday.

The agency filed a lawsuit alleging Amazon’s Ring doorbell unit violated a portion of the FTC Act that prohibits unfair or deceptive business practices, which Amazon settled by agreeing to pay $5.8 million.

As part of the proposed settlement, Ring is required to delete any customer videos and data collected from an individual’s face, referred to as “face embeddings,” that it obtained prior to 2018. It must also delete any work products it derived from those videos.

A separate suit alleges Amazon violated the FTC Act and Children’s Online Privacy Protection Act by illegally retaining thousands of children’s information through their profiles with the Alexa voice assistant. Amazon paid $25 million to settle that suit.

The Department of Justice filed the Alexa complaint and proposed settlement on behalf of the FTC. The government alleged that Amazon kept voice and geolocation information associated with young users for years while preventing parents from using their rights to delete their kids’ data under the COPPA Rule.

Under the proposed settlement, Amazon will have to delete inactive child accounts as well as some voice recordings and geolocation information. It also would be prohibited from using that information to train its algorithms.

Amazon has faced scrutiny over the data that’s collected by its kids-oriented Echo smart speakers, which use Alexa to respond to commands.

The FTC said in a press release that kids’ speech patterns could have been especially valuable to Amazon since they differ from those of adults. That means the recordings of kids’ voices could have provided an important training dataset for the Alexa algorithm to better respond to kids’ voices. The government alleged Amazon failed to create an effective system to honor data deletion requests.

Alongside the $25 million civil penalty, if approved by the court, Amazon will be prohibited from using children’s voice information and geolocation data subject to deletion requests for creating or improving any data product. Amazon will also be required to delete inactive child accounts on Alexa, notify users about the government action against the company and of its retention and deletion practices. Amazon will also have to implement a privacy program to govern its use of geolocation information.

Both settlements must be approved by a court to take effect. The FTC’s ability to pursue monetary relief for consumers is limited by a 2021 Supreme Court ruling that narrowed the scope of the types of financial remedies it can impose.

Amazon published blog posts responding to the settlements on its site and Ring’s website. The company said it built Alexa with strong privacy protections and customer controls; designed Amazon Kids, a content service catered for children, to comply with COPPA; and worked with the FTC before expanding Amazon Kids to include Alexa. It added that Ring addressed the privacy and security issues before the FTC began its inquiry.

“Our devices and services are built to protect customers’ privacy, and to provide customers with control over their experience,” Amazon spokesperson Emma Daniels said in a statement. “While we disagree with the FTC’s claims regarding both Alexa and Ring, and deny violating the law, these settlements put these matters behind us.”

What allegedly happened with Ring

While Ring has claimed its products help keep customers safer with its doorbell security cameras, the FTC alleged that Ring instead compromised customer information by giving third-party contractors access to customer videos, even when it was unnecessary to perform their jobs.

Ring employees and those who worked for a third-party contractor in Ukraine could access and download every customer’s videos, with no technical or procedural restrictions on the practice before July 2017, the FTC alleged.

The agency claims Ring did not have any privacy or data security training before 2018, even as the company’s employee handbook prohibited misuse of customer data. It also alleges Ring failed to implement basic security measures to protect users’ information from online threats like “credential stuffing” and “brute force” attacks, despite warnings from employees, external security researchers and media reports.

In one instance, a Ring employee allegedly viewed thousands of videos from at least 81 different female users from cameras labeled for use in intimate spaces, like “Master Bedroom,” “Master Bathroom” and “Spy Cam.” Between June and August 2017, the FTC alleged, the employee looked through the videos for often at least an hour a day on hundreds of occasions.

Another employee who reported the alleged inappropriate access was told by a supervisor that it was “‘normal’ for an engineer to view so many accounts,” according to the complaint. “Only after the supervisor noticed that the male employee was only viewing videos of ‘pretty girls’ did the supervisor escalate the report of misconduct,” the complaint alleges, and the employee was ultimately fired.

Ring narrowed employee access to customer videos in September 2017, the complaint says, so that customers had to consent to customer service agents accessing their videos. But even then, the FTC alleged, Ring allowed hundreds of employees and Ukraine-based contractors to continue accessing all video data.

“Importantly, because Ring failed to implement basic measures to monitor and detect inappropriate access before February 2019, Ring has no idea how many instances of inappropriate access to customers’ sensitive video data actually occurred,” the complaint alleges.

Amazon acquired Ring for a reported $1 billion in 2018 and the company now operates as a subsidiary of Amazon. The deal has helped Amazon grow its presence in the smart home and home security categories. But Ring has also drawn criticism from privacy and civil liberties advocates over a controversial partnership with thousands of police departments across the country.

Ring’s security protocols have been criticized previously. In 2020, Ring said it fired four employees for peeping into customer video feeds after reports from The Intercept and The Information found that Ring staffers in Ukraine were given unfettered access to videos from Ring cameras around the world.

The company strengthened its security measures after a series of incidents wherein hackers gained access to a number of users’ cameras. In one case, hackers were able to watch and communicate with an 8-year old girl. Ring blamed the issue on users reusing their passwords.

Technology

Apple’s market share slides in China as iPhone shipments decline, analyst Kuo says

Published

18 hours ago

January 10, 2025

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Apple's market share slides in China as iPhone shipments decline, analyst Kuo says

Jaap Arriens | Nurphoto | Getty Images

Apple is losing market share in China due to declining iPhone shipments, supply chain analyst Ming-Chi Kuo wrote in a report on Friday. The stock slid 2.4%.

“Apple has adopted a cautious stance when discussing 2025 iPhone production plans with key suppliers,” Kuo, an analyst at TF Securities, wrote in the post. He added that despite the expected launch of the new iPhone SE 4, shipments are expected to decline 6% year over year for the first half of 2025.

Kuo expects Apple’s market share to continue to slide, as two of the coming iPhones are so thin that they likely will only support eSIM, which the Chinese market currently does not promote.

“These two models could face shipping momentum challenges unless their design is modified,” he wrote.

Kuo wrote that in December, overall smartphone shipments in China were flat from a year earlier, but iPhone shipments dropped 10% to 12%.

There is also “no evidence” that Apple Intelligence, the company’s on-device artificial intelligence offering, is driving hardware upgrades or services revenue, according to Kuo. He wrote that the feature “has not boosted iPhone replacement demand,” according to a supply chain survey he conducted, and added that in his view, the feature’s appeal “has significantly declined compared to cloud-based AI services, which have advanced rapidly in subsequent months.”

Apple’s estimated iPhone shipments total about 220 million units for 2024 and between about 220 million and 225 million for this year, Kuo wrote. That is “below the market consensus of 240 million or more,” he wrote.

Apple did not immediately respond to CNBC’s request for comment.

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Technology

Amazon to halt some of its DEI programs: Internal memo

Published

18 hours ago

January 10, 2025

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Amazon to halt some of its DEI programs: Internal memo

Amazon said it is halting some of its diversity and inclusion initiatives, joining a growing list of major corporations that have made similar moves in the face of increasing public and legal scrutiny.

In a Dec. 16 internal note to staffers that was obtained by CNBC, Candi Castleberry, Amazon’s VP of inclusive experiences and technology, said the company was in the process of “winding down outdated programs and materials” as part of a broader review of hundreds of initiatives.

“Rather than have individual groups build programs, we are focusing on programs with proven outcomes — and we also aim to foster a more truly inclusive culture,” Castleberry wrote in the note, which was first reported by Bloomberg.

Castleberry’s memo doesn’t say which programs the company is dropping as a result of its review. The company typically releases annual data on the racial and gender makeup of its workforce, and it also operates Black, LGBTQ+, indigenous and veteran employee resource groups, among others.

In 2020, Amazon set a goal of doubling the number of Black employees in vice president and director roles. It announced the same goal in 2021 and also pledged to hire 30% more Black employees for product manager, engineer and other corporate roles.

Meta on Friday made a similar retreat from its diversity, equity and inclusion initiatives. The social media company said it’s ending its approach of considering qualified candidates from underrepresented groups for open roles and its equity and inclusion training programs. The decision drew backlash from Meta employees, including one staffer who wrote, “If you don’t stand by your principles when things get difficult, they aren’t values. They’re hobbies.”

Other companies, including McDonald’s, Walmart and Ford, have also made changes to their DEI initiatives in recent months. Rising conservative backlash and the Supreme Court’s ruling against affirmative action in 2023 spurred many corporations to alter or discontinue their DEI programs.

Amazon, which is the nation’s second-largest private employer behind Walmart, also recently made changes to its “Our Positions” webpage, which lays out the company’s stance on a variety of policy issues. Previously, there were separate sections dedicated to “Equity for Black people,” “Diversity, equity and inclusion” and “LGBTQ+ rights,” according to records from the Internet Archive’s Wayback Machine.

The current webpage has streamlined those sections into a single paragraph. The section says that Amazon believes in creating a diverse and inclusive company and that inequitable treatment of anyone is unacceptable. The Information earlier reported the changes.

Amazon spokesperson Kelly Nantel told CNBC in a statement: “We update this page from time to time to ensure that it reflects updates we’ve made to various programs and positions.”

Read the full memo from Amazon’s Castleberry:

Team,

As we head toward the end of the year, I want to give another update on the work we’ve been doing around representation and inclusion.

As a large, global company that operates in different countries and industries, we serve hundreds of millions of customers from a range of backgrounds and globally diverse communities. To serve them effectively, we need millions of employees and partners that reflect our customers and communities. We strive to be representative of those customers and build a culture that’s inclusive for everyone.

In the last few years we took a new approach, reviewing hundreds of programs across the company, using science to evaluate their effectiveness, impact, and ROI — identifying the ones we believed should continue. Each one of these addresses a specific disparity, and is designed to end when that disparity is eliminated. In parallel, we worked to unify employee groups together under one umbrella, and build programs that are open to all. Rather than have individual groups build programs, we are focusing on programs with proven outcomes — and we also aim to foster a more truly inclusive culture. You can read more about this on our Together at Amazon page on A to Z.

This approach — where we move away from programs that were separate from our existing processes, and instead integrating our work into existing processes so they become durable — is the evolution to “built in” and “born inclusive,” instead of “bolted on.” As part of this evolution, we’ve been winding down outdated programs and materials, and we’re aiming to complete that by the end of 2024. We also know there will always be individuals or teams who continue to do well-intentioned things that don’t align with our company-wide approach, and we might not always see those right away. But we’ll keep at it.

We’ll continue to share ongoing updates, and appreciate your hard work in driving this progress. We believe this is important work, so we’ll keep investing in programs that help us reflect those audiences, help employees grow, thrive, and connect, and we remain dedicated to delivering inclusive experiences for customers, employees, and communities around the world.

#InThisTogether,

Candi

Technology

Tesla recalling 239,000 vehicles in U.S. over rearview camera failures

Published

18 hours ago

January 10, 2025

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Tesla recalling 239,000 vehicles in U.S. over rearview camera failures

New Tesla Model 3 vehicles on a truck at a logistics drop zone in Seattle, Washington, on Aug. 22, 2024.

M. Scott Brauer | Bloomberg | Getty Images

Tesla is voluntarily recalling about 239,000 of its electric vehicles in the U.S. to fix an issue that can cause its rearview cameras to fail, the company disclosed in filings posted Friday to the National Highway Traffic Safety Administration’s website.

“A rearview camera that does not display an image reduces the driver’s rear view, increasing the risk of a crash,” Tesla wrote in a letter to the regulator. The recall applies to Tesla’s 2024-2025 Model 3 and Model S sedans, and to its 2023-2025 Model X and Model Y SUVs.

The company also said in the acknowledgement letter that it has already “released an over-the-air (OTA) software update, free of charge” that can fix some of the vehicles’ camera issues.

In 2024, Tesla issued 16 recalls in the U.S. that applied to 5.14 million of its EVs, according to NHTSA data. The recall remedies included a mix of over-the-air software updates and parts replacements. More than 40% of last year’s recalls pertained to issues with the newest vehicle in the company’s lineup, the Cybertruck, an angular steel pickup that Tesla began delivering to customers in late 2023.

Regarding the latest recall, the company said it had received 887 warranty claims and dozens of field reports but told the NHTSA that it was not aware of any injurious, fatal or other collisions resulting from the rearview camera failures.

Other customers with vehicles that “experienced a circuit board failure or stress that may lead to a circuit board failure,” which cause the backup camera failures, can have their vehicles’ computers replaced by Tesla, free of charge, the company said.

Tesla did not immediately respond to CNBC’s request for comment.