The last day has not been kind to the reputation of Amazon, which has found itself under fire from American regulators, British tax-fairness campaigners—and its own staff.
The biggest news came courtesy of the U.S. Federal Trade Commission and Department of Justice, which yesterday charged Amazon over serious violations of kids’ privacy with its Alexa assistant—Amazon told parents and other users that they could delete Alexa voice recordings and geolocation data, but, if they did, Amazon still held onto some of the data for years so it could better train Alexa.
The FTC and DOJ called this a deception and a violation of the Children’s Online Privacy Protection Rule, or COPPA. Under the proposed settlement, Amazon will have to pay $25 million—more importantly, it will also have to change its deletion practices, delete the data it shouldn’t have kept, and avoid using that data to train its algorithms.
“Adding insult to privacy injury, for at least a year, Amazon gave 30,000 employees access to Alexa users’ voice recordings—even though many of those staffers had no business need for the files,” wrote FTC senior attorney Lesley Fair in a blog post.
Separately, the FTC also charged Amazon’s Ring subsidiary with “compromising its customers’ privacy by allowing any employee or contractor to access consumers’ private videos and by failing to implement basic privacy and security protections, enabling hackers to take control of consumers’ accounts, cameras, and videos.”
This one’s painful—read it and weep:
“One employee over several months viewed thousands of video recordings belonging to female users of Ring cameras that surveilled intimate spaces in their homes such as their bathrooms or bedrooms. The employee wasn’t stopped until another employee discovered the misconduct. Even after Ring imposed restrictions on who could access customers’ videos, the company wasn’t able to determine how many other employees inappropriately accessed private videos because Ring failed to implement basic measures to monitor and detect employees’ video access…Hackers taunted several children with racist slurs, sexually propositioned individuals, and threatened a family with physical harm if they didn’t pay a ransom.”
A proposed settlement would see Ring pay $5.8 million for consumer refunds—and again, it would have to “delete data products such as data, models, and algorithms derived from videos it unlawfully reviewed.”
Amazon has therefore become the highest-profile target of an FTC algorithmic-destruction order (previous recipients include Cambridge Analytica, Everalbum, and Kurbo).
As Signal Foundation president and A.I.-ethics maven Meredith Whittaker observed: “Data protection is A.I. regulation.” FTC Chair Lina Khan and Commissioners Alvaro Bedoya and Rebecca Kelly Slaughter made a similar point in a statement—relating to the Alexa case—that was explicitly directed at all those Big Tech players racing to train their big A.I. models:
“Machine learning is no excuse to break the law. Claims from businesses that data must be indefinitely retained to improve algorithms do not override legal bans on indefinite retention of data. The data you use to improve your algorithms must be lawfully collected and lawfully retained. Companies would do well to heed this lesson.”
Amazon: “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.” A spokesperson said the changes it has to make to its Alexa policies only amount to “a small modification to our already strong practices,” and also that “Ring promptly addressed the issues at hand on its own years ago, well before the FTC began its inquiry.” The company published separate blog posts on the Ring and Alexa settlements. It didn’t address the stuff about having to retrain or delete its algorithms, though.
Meanwhile, away from regulation-land, more than 100 workers at Amazon’s Seattle headquarters staged a planned walkout over a trio of issues: Amazon’s heavy climate impact (the company just quietly walked back a “Shipment Zero” commitment to make half its shipments carbon-neutral); its recently-enacted policy of forcing most workers back to the office for at least three days a week; and the recent laying-off of around 27,000 employees.
Amazon responded by reiterating its goal of “getting to net carbon zero by 2040” and claiming it will only use renewable energy as of 2025. It defended its return-to-office policy and said “it’s going to take time” for workers to adjust.
On top of all that, the U.K.’s Fair Tax Foundation is spitting fire after Amazon’s main division in the country just avoided paying any corporation tax whatsoever for the second year running. There’s nothing illegal about that—a government scheme allowed Amazon to offset its local investments in warehouse robotics and software development against profits—but it gives tax campaigners an obvious line of attack. (Amazon noted that other parts of its business paid £781m in direct taxes and £2.8bn in indirect taxes last year).
None of this has dented Amazon’s share price, of course. But particularly regarding those privacy violations—a lot of people are going to stop trusting Ring and Alexa—I’d be very surprised if the reputational damage to the company and its wares doesn’t come back to bite it over time.
More news below.
Want to send thoughts or suggestions to Data Sheet? Drop a line here.
David Meyer
Data Sheet’s daily news section was written and curated by Andrea Guzman.
NEWSWORTHY
Twitter is slow to remove hate speech. A new report from the Center for Countering Digital Hate found that offensive tweets from users with the blue checkmark stayed on the social media platform for several days after the organization reported them. The CCDH flagged 100 posts by Twitter Blue users that contained neo-Nazi, racist, homophobic, antisemitic, or conspiracy content. Four days later, just one of the tweets had been removed. Since the tweets came from Twitter Blue accounts, they had extra prominence and distribution on the service.
Layoffs at top crypto exchange. Binance could be laying off as much as 20% of its 8,000-employee workforce, independent journalist Colin Wu reported Wednesday. Binance denied the cost-cutting measure, and a spokesperson told Fortune that the company is focusing on whether it has “the right talent.” The company didn’t say how many people would be laid off but clarified that it’s still looking to fill hundreds of open roles. This comes as crypto prices fall and the firm faces scrutiny from regulators like the Commodity Futures Trading Commission and the Department of Justice.
Automatic brakes could be standard for new U.S. cars. A rule proposed by the Department of Transportation’s National Highway Traffic Safety Administration would require all new cars and trucks sold in the U.S. to have automatic emergency braking systems in an effort to prevent crashes. If adopted, nearly all light vehicles will have AEB technology three years after the final rule is established. TechCrunch reports that AEB tech uses sensors and software to detect when a vehicle is close to crashing and applies the brakes if the driver hasn’t or applies extra force if they have. While some vehicles already come equipped with the safety feature and others require the customer to pay extra for it, consumer safety advocates have long called for rules requiring carmakers to include AEB systems.
SIGNIFICANT FIGURES
$12,000 per 50 million requests
—Reddit’s pricing for API requests made by third-party apps under its new policy. Developer Christian Selig says that could cost Apollo, a Reddit app for iOS, about $20 million per year operating at the current scale where it made 7 billion API requests last month. “While Reddit has been communicative and civil throughout this process with half a dozen phone calls back and forth that I thought went really well, I don’t see how this pricing is anything based in reality or remotely reasonable,” Selig posted on Reddit.
IN CASE YOU MISSED IT
Salesforce CEO Marc Benioff talks up A.I. ambitions—and dinner with Sam Altman—in earnings call anecdote, by Kylie Robison
Top publishing CEO says people are reading more because streaming services are too expensive: ‘You’d get 2 books every month’ for the cost of Netflix, by Prarthana Prakash
Salesforce picked one of its own execs to become Slack’s CEO. Now she’s patching up a $27.7 billion marriage, by Emma Hinchliffe
Billionaire Virgin founder Richard Branson shares the most useful skills for entrepreneurs, by Chloe Taylor
BEFORE YOU GO
The first X-ray of a single atom. In a long-awaited discovery that researchers say could “transform the world,” scientists have taken the first X-ray of just one atom. Physicists and chemists from Ohio University, Argonne National Laboratory, and the University of Illinois-Chicago used a purpose-built synchrotron X-ray instrument to detect an atom. Scientists positioned a specialized detector with a sharp metal tip close to the sample and collected X-ray excited electrons where elemental fingerprints were then found.
Along with the X-ray, the team aimed to investigate the chemical states of individual atoms, including rare earth atoms. It’s a significant finding since rare earth materials are used in devices like cell phones, computers, and televisions. A coauthor of the paper published in Nature, Tolulope Michael Ajayi, says using X-rays to detect individual atoms could lead to new technologies in areas like quantum information and the detection of trace elements in environmental and medical research.
This is the web version of Data Sheet, a daily newsletter on the business of tech. Sign up to get it delivered free to your inbox.
