Amazon To Pay $25M Settlement for FTC Spying Suit

Amazon avoids lengthy court procedures again.

The popular e-commerce company recently agreed to pay $5.8 million to settle a recently announced privacy lawsuit the Federal Trade Commission (FTC) filed in light of the privacy issues it found in its investigation.

Amazon stated it doesn't agree with the FTC's claims despite settling the lawsuit out of court, per Engadget.

Amazon Ring FTC Lawsuit details

Amazon's Ring unit has become the target of scrutiny yet again. The FTC's lawsuit accused it of unlawfully deceiving its customers over the privacy of their data and the videos Ring collects from its products, per The Verge.

According to the FTC's lawsuit, which it submitted in the district court for the District of California, Ring ignored information security considerations when it believed they would interfere with growth. As such, in pursuit of rapid product development, Ring didn't limit its access to customers' video data to employees who needed access to perform their jobs before 2017, such as customer support, product improvement, etc.

To further development, Ring gave its employees, including hundreds of Ukraine-based third-party contractors, full access to every customer video, regardless of whether they needed that access to perform their job function.

Unfortunately, this meant Ring violated the privacy of both Ring customers and other workers using Ring products. To prove such abuse happened, the FTC listed several cases where hacked to sexually harass and spy on women, stalk female co-workers who used Ring products, utter racially-charged slurs toward children, and more.

The FTC also made noted that a former Ring employee accessed customers' Ring videos without their knowledge or consent, thanks to the company's decisions. The employee even took the videos with them when they left the company in Sept. 2019 without customers' consent or knowledge - even Ring didn't know that something was amiss until a whistleblower revealed the employee's actions.

Furthermore, the government agency claims that Amazon failed to address Ring's privacy breaches after buying the company in 2018, allowing the issues from at least 2016 to persist until 2020.

Amazon's Response To The Lawsuit

While Amazon paid $5.8 million to settle the lawsuit and resolve the issue out of court, Ring spokesperson Emma Daniels said that the company does not agree with the FTC's claims, saying that Ring already addressed the issues the government agency stated in its lawsuit years ago, well before it began its inquiry.

"While we disagree with the FTC's allegations and deny violating the law, this settlement resolves this matter so we can focus on innovating on behalf of our customers," Daniels said.

A federal court must approve Amazon's proposed settlement before the company and Ring can formally settle the case.

Ring also posted a statement regarding its proposed settlement; the company refuted each of the points the FTC made in its lawsuit.

The FTC's lawsuit is the government agency's first action against Amazon since Chair Lina Khan took over the agency in 2021, per the Los Angeles Times.