According to people familiar with the case who spoke with Bloomberg, the FTC is recommending filing a complaint that Amazon's Alexa-powered speakers are collecting information on children under the age of 13 without the consent of their parents. (Related: House passes bill requiring companies to inform consumers if their smart devices have cameras or microphones.)
If this allegation is accurate, it would be a violation of the Children's Online Privacy Protection Act (COPPA). The Department of Justice is expected to file a lawsuit on the FTC's behalf as soon as next month.
While having the power to bring Amazon to court on its own, the FTC is obligated to first refer the complaint to the Civil Division of the Justice Department. The division and department have 45 days to review the details before choosing to either bring the case against Amazon to court or decline to sue. If the department does decline to sue, the FTC will then be free to proceed on its own.
The potential lawsuit against Amazon comes amid an FTC-led crackdown on data collection by tech giants over the last few years under FTC Chair Lina Khan, who has developed a reputation as a "Big Tech skeptic" for her antitrust campaigns.
Speaking at a recent conference in Washington, D.C., Khan said the law "prohibits firms from condition access to certain services on an endless collection of data." She added that the law has "substantive limitations on when firms can be collecting data."
Several years before her appointment to the FTC, Khan published a legal paper in the Yale Law Journal characterizing Amazon as a modern monopolist whose market power was so massive that it required "addressing" as it creates an anti-competitive environment.
Khan argued in favor of restoring "traditional antitrust and competition policy," or applying "common carrier obligations and duties" traditionally required of certain corporations, such as telecommunications, transportation and pipeline companies.
Amazon itself has taken issue with Khan. In 2021, Amazon filed a petition with the FTC arguing that Khan's past criticisms of Amazon should be enough reason to get her excused from investigations involving the tech giant.
The FTC's potential lawsuit against Amazon comes around four years after several children's advocacy organizations filed a complaint with the FTC against Amazon in 2019, citing two products – the Echo Dot Kids Edition and Freetime.
The organizations involved are the Campaign for a Commercial-Free Childhood – now called Fairplay – and the Center for Digital Democracy.
According to the 2019 complaint, Amazon allegedly held on to voice recordings of children indefinitely. The organizations even alleged that Amazon held on to personal data even after users tried to delete it.
When pressed, Amazon has refused to adequately verify whether it had parental consent to collect and store the data. Amazon further claimed that Echo Dot Kids Edition and FreeTime, since rebranded as Kids+, immediately complied with COPPA when the complaint was filed.
The complaint with the FTC also noted that most of the applications on the Alexa voice assistant the company tailored to kids did not include privacy policies at all.
One COPPA violation is limited to slightly over $50,000 per incident. Each affected user is legally considered a separate violation, which means the total fine against Amazon could be significantly higher.
Learn the latest news involving Amazon and its founder, Jeff Bezos, on JeffBezosWatch.com.
Watch this clip from "The American Journal" on InfoWars as host Harrison Smith discusses how the Amazon Ring app for Android phones exposed private camera recordings to complete strangers.