Amazon Settles with the FTC, Agreeing to Pay Civil Penalty for Improper Retention of Sensitive Data Collected from Children

By Bill Curtis, Patrick Moorhead - June 15, 2023

Last week, Amazon settled with the FTC, agreeing to pay a civil penalty of $25 million for improper retention of sensitive data collected from children. This includes precise locations and voice recordings, which violated COPPA regulations. While denying the allegations and disputing the violation of the law, Amazon stated that the settlement allows them to move forward and put the matter to rest. In a separate case, Amazon’s Ring unit also settled FTC allegations of employees’ and contractors’ improper access to consumer camera recordings. The same complaint mentioned cyber attacks. According to a company spokesperson, Amazon addressed these claims years ago, before the FTC investigation. The settlement now requires approval from a federal court. This incident serves as a significant wake-up call for Amazon and other major smart home platforms like Google, Apple, and Samsung. It emphasizes the importance of taking privacy seriously to avoid substantial damage to their brands. As an individual, I have chosen to keep my Alexa devices active, as I trust that these large companies understand the repercussions and cannot afford to mishandle privacy matters.

Bill Curtis
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Bill Curtis is the Moor Insights & Strategy Analyst in Residence for large-scale Internet of Things systems. Bill helps enterprises design distributed solutions that integrate the full end-to-end IoT stack from real-world devices to analytics.

Patrick Moorhead
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.