Best Practices

FTC Moves to Protect Consumer Privacy From AI Intrusion

Explore the role of AI in privacy, understand the recent FTC complaints against Amazon and Ring, and discover the importance of lawful data acquisition and biometric data protection in our comprehensive guide.

Protecting Your Privacy

What occurs in your home, what you express within its confines, could not be more private. Yet, recent complaints filed by the Federal Trade Commission (FTC) against tech giants Amazon and Ring have alleged that these companies and others have leveraged this intimate data - voice recordings harvested by Amazon's Alexa voice assistant and video footage from Ring's internet-connected home security cameras - to fine-tune their algorithms, all the while giving insufficient attention to consumers' privacy. These issues, brought to light by recent FTC complaints on June 13, 2023, highlighting crucial lessons for companies using AI, biometric data, and other sensitive information.

AI and Privacy: A Necessary Partnership

In our rapidly digitizing world, AI developers incessantly crave more data, often indiscriminately. However, the collection and retention of consumer data must be approached with caution.

Under the unfairness standard set forth in Section 5 of the FTC Act, the FTC scrutinizes not only the potential benefits of AI but also the costs to consumers, and it appears as though both Amazon and Ring have faltered in this regard. The FTC has accused Ring of enabling spying and harassment through its data access practices, while Amazon's retention of voice data and lax deletion practices have unnecessarily exposed consumers' voice recordings to employees. The message for businesses is clear: The FTC will hold companies accountable for their methods of obtaining, retaining, and using consumer data that powers their algorithms.

Consumer Data: A Matter of Personal Control

Despite the popular belief among some companies, they are not free to use personal data in their possession as they please. The FTC complaints against Amazon and Ring emphasize that companies that disregard consumers' rights to control their data do so at their own risk.

The FTC has alleged that Ring allowed all employees and contractors access to customers' videos to train algorithms, with only a superficial "consent" requirement. This is insufficient to ensure users truly control their information. Moreover, the FTC has accused Amazon of undermining parents' rights under the Children's Online Privacy Protection Act (COPPA) Rule to delete their children's voice recordings. The conclusion is unequivocal: Companies that compromise consumer control of their data risk facing FTC enforcement action.

Ensuring Safe Handling of Sensitive Data

AI developers often depend on human reviewers to label and annotate data that train machine learning algorithms. All too often, however, consumers are not informed that their data is under review.

According to the FTC, Ring has concealed this review process from its customers and allowed reviewers to misuse their access to consumers' videos. As a result, Ring's customers, who purchased its products for enhanced security, became targets of Ring employees' spying and surveillance. The FTC has also stated that Amazon failed to implement appropriate controls to restrict employee access to Alexa users' voice recordings, leading to unnecessary access by thousands of employees. Businesses utilizing human review are hereby warned: Safeguards for sensitive data, including strict access controls, must be a priority, not an afterthought.

FTC Seeks to Safeguard Biometric Data

Recently, the FTC issued a policy statement on the protection of biometric data, which clarified that data such as fingerprints, iris scans, videos, and voice recordings, warrants the highest level of protection due to its inherent sensitivity and the potential for bias, discrimination, and other harmful uses.

The FTC's settlements with Amazon and Ring reaffirm this stance: when the FTC declares protecting biometric data a priority, it is not merely rhetoric - it is a commitment backed by enforcement action.

Camera monitoring kids' bedroom - FTC Moves to Protect Consumer Privacy From AI Intrusion
Camera monitoring kids' bedroom

Children's Privacy: An FTC Priority

In the wake of several enforcement actions concerning kids' and teen privacy, including cases involving Microsoft, Epic Games, Edmodo, Weight Watchers (Kurbo), and Chegg, it should be evident that children's privacy is a top priority for the FTC.

This is particularly true at the intersection of AI and youth privacy. In the Amazon complaint, the FTC alleged that Amazon was permanently storing kids' voice recordings and undermining parents' deletion rights. The FTC also criticized Ring's negligent approach to privacy and security, despite marketing its cameras for monitoring kids' bedrooms. The FTC's stance is firm: It will employ every available tool, including the COPPA Rule and the FTC Act's prohibitions on deceptive and unfair practices, to protect children's privacy.

Lawful Data Acquisition: The Path to Sustainable Data Products

The FTC's actions against Ring, Alexa, Kurbo, Cambridge Analytica, and Everalbum have resulted in several orders requiring companies to delete ill-gotten data and halt the generation of data products derived from such data. These actions underscore that there are no free passes for data misuse. If a company illegally obtains or misuses consumer data, it may very well have to forfeit its data product.

Navigating the Future with The Blacklist Alliance

As we continue to advance in the AI-driven era, privacy remains an uncompromising priority. Businesses must understand the importance of respecting and safeguarding the rights of consumers, ensuring that their data is under their control. The way companies handle data, particularly sensitive information, must be approached with utmost caution, acknowledging the potential implications of their actions. Moreover, it is paramount that organizations adhere to legal guidelines when acquiring and utilizing data, as failure to do so can result in severe repercussions.

While navigating these complex regulations can be a daunting task, partnering with The Blacklist Alliance can make a significant difference. Our comprehensive compliance programs and legal support, we help companies stay abreast of the ever-changing landscape of marketing and consumer relations regulations. Our mission is to ensure that businesses can leverage the potential of AI while maintaining the trust and confidence of their customers and staying fully compliant with regulatory standards.