Amazon saved children's voices recorded by Alexa even after parents asked for it to be deleted. Now it's paying a $25 million fine.

• Amazon has agreed to change how it handles children's data recorded by Alexa.
• Under a settlement, the company will now delete all data, including voice recordings, when requested.

Amazon has agreed to change how it handles children's data, including what it collects through its popular Alexa voice assistant, by the end of the year — and to pay the US government $25 million within the next week — under a settlement approved this week by a federal judge in the state of Washington.

The settlement follows a 2019 complaint submitted to the Federal Trade Commission by a coalition of privacy advocates who accused Amazon of holding on to children's voice recordings, and transcripts of those recordings, far longer than allowed under the Children's Online Privacy Protect Act.

Passed in 1998, COPPA is a federal law that says websites should only retain children's personal information "as long as is reasonably necessary to fulfill the purpose for which the information was collected."

Private lawsuits against the company were also filed around the same time.

Although Amazon has always insisted it abides by federal privacy protections and has admitted no wrongdoing, the settlement it agreed to requires it to change how it handles user data.

"Parents want and deserve to have control over data related to their young children — this includes recordings of the child's voice, the child's location, and the questions the child asks an Alexa device," Tessa M. Gorman, an acting US attorney in Washington, said in a statement.

Changes coming to Alexa

In particular, as detailed in the July 19 court order, Amazon will "design and implement" a process to delete data from children under the age of 13 who have not used Alexa for at least 18 months. It will also notify a parent or guardian when it does so.

Amazon will also have to flag the settlement on its "Parent Dashboard," where adults can set limits on children's use of Amazon services. A spokesperson for the company told Insider that it will put that notice there within the next month, as required by the settlement.

"While we disagree with the FTC's claims and deny violating the law, this settlement puts the matter behind us," Amazon said in a statement. "As part of the settlement, we agreed to make a small modification to our already strong practices, and will remove child profiles that have been inactive for more than 18 months unless a parent or guardian chooses to keep them."

While Alexa and its associated devices have long been subject to privacy concerns, Amazon has not succeeded in directly monetizing its ubiquitous voice assistant.

Last year, Insider reported that the division responsible for Alexa is a "money pit," losing billions of dollars in part because consumers have balked at placing significant orders through the company's popular Echo device, preferring instead to ask it the weather or play a song.

The division is also now responsible for Amazon having to pay the US Treasury Department a $25 million civil penalty.

Biden's FTC takes on 'the biggest players'

Earlier this year, at the request of the FTC, the Department of Justice itself filed a lawsuit against Amazon, charging the company with misleading consumers about the extent to which it would retain access to children's data.

According to the federal complaint, filed in May, Amazon stored the personal information of children — including recordings and transcripts of those recordings — even when their accounts have "been inactive for years," which it described as a violation of COPPA.

Even when parents explicitly asked Amazon to delete their children's data, Amazon, "for a significant period of time," failed to do so by continuing to hold on to transcripts of their voice recordings, according to the complaint, which it used to improve its Alexa algorithm.

Josh Golin, executive director of Fairplay, a nonprofit that advocates for protecting children from commercial advertising, said he was pleased with how the settlement resolves many of the issues his group raised along with others in the Trump-era complaint filed with the FTC.

"For too long, Amazon has treated children's sensitive data as its own property," Golin said in a statement provided to Insider. The settlement will impose "significant limitations" on the company's handling of that data, he said, and shows that, under the Biden administration and FTC Chair Lina M. Khan, federal regulators are now "willing to take on the biggest players in order to protect children's privacy."

The question now is whether federal regulators — in the years to come — will diligently enforce the settlement, according to Suzanne Bernstein, a law fellow at the Electronic Privacy Information Center.

"Unfortunately, Big Tech has long demonstrated that without strict monitoring, they cannot be counted on to comply with FTC orders," Bernstein told Insider. The FTC, she said, "must closely monitor Amazon's compliance with this order to ensure that it no longer illegally profits off of children's personal data."

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