FTC readies children's privacy case against Amazon

The Federal Trade Commission is planning to move forward soon with a case against Amazon over alleged privacy violations stemming from the use of children’s data with the company’s Alexa voice assistant, according to three people with knowledge of the matter.

The antitrust and consumer protection agency has been investigating Amazon on a number of fronts for several years, including for possible violations of the Children’s Online Privacy Protection Act, which could potentially allow the agency to collect large civil monetary penalties.

Before it brings a case, the FTC must first refer a complaint to the consumer protection branch at the civil division of the Justice Department, which it is expected to do soon, said the people, who were granted anonymity to discuss a confidential matter. The exact timing of the referral is not known, and the agency’s plans are subject to change until a case is filed.

The Justice Department has 45 days to bring a case once it is referred. If it declines, the FTC can proceed on its own.

An FTC spokesperson declined to comment. It could not be learned whether the FTC is interested in settling the case, and the company declined to comment. The company previously said it is in compliance with COPPA, and that its Amazon Kids offering for Alexa requires parental consent and gives parents full control over their children’s use of the product.

Much of the attention on the FTC’s investigations of Amazon has been focused on a yearslong antitrust probe of every part of the company’s business, and President Biden’s hard-charging FTC chair, Lina Khan, first gained international prominence with a legal paper outlining an antitrust case against the tech giant.

However, the agency has several ongoing consumer protection investigations into the company, including for potential privacy and data security violations in its Ring camera and home security business.

Financial penalties under COPPA are limited to just over $50,000 per violation, though each affected person is considered a separate violation and the total number can add up quickly for a company the size of Amazon.

The details of the FTC’s COPPA case couldn’t be learned. However, in 2019, a group of consumer and digital rights organizations filed a complaint with the FTC over a version of the company’s Echo Dot smart speaker geared toward kids. Among the allegations, the groups claim Amazon doesn’t properly provide notice to parents on the exact information collected by children using the device, and makes it too difficult to delete data, including transcripts of kids’ interactions with the devices.