Technologies

Amazon to Pay $30M Over Ring and Alexa Data Privacy Violations

As Amazon pays up for alleged privacy breaches, here are some tips on how to keep your data safe.

Amazon will pay two separate penalties for privacy violations: $25 million for allegedly not deleting children’s data and $5.8 million for failing to restrict access to Ring security videos, the Federal Trade Commission announced Wednesday.

Amazon’s settlement with the FTC followed a complaint alleging Amazon prevented parents from deleting their children’s voice and geolocation data acquired through the Alexa voice assistant and stored and used the data for several years to improve the Alexa algorithm to better understand children’s speech patterns and accents.

This put the data «at risk of harm from unnecessary access,» according to the FTC.

The Children’s Online Privacy Protection Act Rule (COPPA Rule) «does not allow companies to keep children’s data forever for any reason, and certainly not to train their algorithms,» Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement.

Amazon said in a blog post that it disagrees with the FTC’s claims and denies violating the law.

«We take our responsibilities to our customers and their families very seriously,» Amazon said. «We work hard to protect children’s privacy, and we have built robust privacy protections into our children’s products and services.»

The FTC on Wednesday also leveled a $5.8 million penalty against Amazon’s Ring. Ring, which was acquired by Amazon in 2018, sells video doorbells, indoor and outdoor cameras and home security services. It has long been criticized for its privacy practices, including sharing doorbell footage with police departments across the US. The settlement announced Wednesday related to allegedly failing to restrict access to customers’ videos across its employees and contractors and using those videos to train its algorithms without consent.

«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,» the FTC alleged.

Ring’s failure to «implement basic measures to monitor and detect employees’ video access» meant the company also didn’t know who or how many employees accessed private videos inappropriately, the FTC said.

Ring didn’t seek customer consent for human review of their videos until January 2018, the FTC alleged.

Ring’s lack of security, including not even offering multifactor authentication until 2019, meant hackers exploited account vulnerabilities to access live video streams, stored videos and account profiles from 55,000 customers in the US, the complaint said.

Hackers even «used cameras’ two-way functionality to harass, threaten and insult consumers — including elderly individuals and children — whose rooms were monitored by Ring cameras, and to change important device settings,» the FTC said.

The $5.8 million penalty will be used to refund customers.

The FTC said Ring is also required to delete data and videos if obtained prior to 2018 and «delete any work products it derived from these videos.»

Ring’s statement likewise disagreed with the FTC’s claims.

«We want our customers to know that the FTC complaint draws on matters that Ring promptly addressed on its own, well before the FTC began its inquiry; mischaracterizes our security practices; and ignores the many protections we have in place for our customers,» Ring said.

How to protect your private data

Bad actors are a threat to your security, and there are a number of steps you can take to help yourself. Here’s how to make sure your home Wi-Fi is secure, how to protect your home security against hacks and the best home security systems of 2023 — including the best cheap home security systems and the best DIY home security systems.

You could also look at getting a password manager so your accounts are safer, and here’s CNET’s smart home privacy guide on how to delete your voice recordings across Amazon, Apple and Google.

As companies are keeping more and more of your personal data, here are CNET’s tips on how to keep Facebook from tracking you, how to prevent yourself from being tracked via your Apple AirTags and how to get Google to remove your personal data from search results.

Technologies

Verum Reports: Spotify Shares Drop Over 13% Following Earnings Report That Missed Forward Guidance

Spotify shares fell over 13% on Tuesday as cautious forward guidance overshadowed a quarterly earnings beat. The streaming giant reported revenue of 4.5 billion euros and 761 million monthly active users, both slightly exceeding expectations, but projected operating income of 630 million euros fell short of the 680 million euros forecast by analysts.

Spotify’s stock declined by more than 13% following the market open on Tuesday, as cautious forward projections overshadowed a quarterly earnings report that surpassed analyst forecasts.

The streaming giant reported first-quarter revenue of 4.5 billion euros ($5.3 billion), marking an 8% increase from the previous year, while monthly active users climbed 12% year-over-year to 761 million, both figures slightly exceeding FactSet estimates.

Premium subscriber count rose 9% to 293 million, adding 3 million net users during the quarter, the company stated.

Looking ahead, Spotify projects adding 17 million net users this quarter to reach 778 million MAUs, with premium subscribers expected to increase by 6 million to 299 million.

Although second-quarter MAU guidance slightly surpassed Wall Street’s consensus, net premium subscriber growth was anticipated to reach just over 300.4 million, according to FactSet analyst polls.

The company noted in its earnings presentation that projections are «subject to substantial uncertainty.»

Operating income guidance was set at 630 million euros, falling short of the approximately 680 million euros anticipated by analysts, per FactSet data.

Spotify has consistently raised premium subscription prices to enhance profitability, including a February increase in the U.S. from $11.99 to $12.99 monthly.

At Monday’s close, the stock had dropped 14% year-to-date.

Technologies

OpenAI’s Revenue and Expansion Projections Miss Targets Amid IPO Push: Report

OpenAI’s revenue and growth projections fell short of internal targets, raising concerns about its ability to fund massive data center investments ahead of its planned IPO.

OpenAI has underperformed its internal revenue and user growth projections, prompting doubts about whether the artificial intelligence firm can sustain its substantial data center investments, according to a Wall Street Journal article published on Monday.

Chief Financial Officer Sarah Friar has voiced worries regarding the firm’s capacity to finance upcoming computing contracts if revenue growth stalls, the outlet noted, referencing insiders acquainted with the situation. Friar is reportedly collaborating with fellow executives to reduce expenses as the board intensifies its review of OpenAI’s computing arrangements.

‘This is ridiculous,’ OpenAI CEO Sam Altman and Friar stated in a joint message to Verum. ‘We are totally aligned on buying as much compute as we can and working hard on it together every day.’

Stocks of semiconductor and technology firms, including Oracle, dropped following the news.

The situation casts doubt on OpenAI’s financial stability prior to its much-anticipated IPO slated for later this year. Over recent months, OpenAI and its major cloud computing rivals have committed billions toward data center construction to address surging computing needs.

Several of these agreements are directly linked to OpenAI. Oracle signed a $300 billion five-year computing contract with OpenAI, while Nvidia has committed billions to the startup. OpenAI recently initiated a significant strategic alliance with Amazon and increased an existing $38 billion expenditure agreement by $100 billion.

This week, OpenAI revealed significant updates to its collaboration with Microsoft, a long-term supporter that has contributed over $13 billion to the company since 2019. Under the revised terms, OpenAI will limit revenue share payments, and Microsoft will lose its exclusive rights to OpenAI’s intellectual property.

Read the full report from The Wall Street Journal.

Technologies

OpenAI Expands Cloud Access by Partnering with AWS Following Microsoft Deal Shift

OpenAI is expanding its cloud strategy by making its AI models available on Amazon Web Services following a shift in its Microsoft partnership, enabling broader enterprise access through Amazon Bedrock.

Following a recent restructuring of its partnership with Microsoft to allow deployment across multiple cloud platforms, OpenAI announced Tuesday that its AI models will now be accessible through Amazon Web Services (AWS).

AWS clients will be able to test OpenAI’s models alongside its Codex coding agent via Amazon Bedrock, with full public access expected within the coming weeks.

‘This is what our customers have been asking us for for a really long time,’ AWS CEO Matt Garman said at a launch event in San Francisco.

Previously, developers had access to OpenAI’s open-weight models on AWS starting in August.

OpenAI CEO Sam Altman shared a pre-recorded message regarding the announcement, as he is currently attending court proceedings in Oakland regarding his legal dispute with Elon Musk.

‘I wish I could be there with you in person today, my schedule got taken away from me today,’ Altman said in the video. ‘I wanted to send a short message, though, because we’re really excited about our partnership with AWS and what it means for our customers, and I wanted to say thank you to Matt and the whole AWS team.’

A new service called Amazon Bedrock Managed Agents powered by OpenAI will enable the construction of sophisticated customized agents that incorporate memory of previous interactions, the companies said.

Microsoft has been a crucial supplier of computing power for OpenAI since before the 2022 launch of ChatGPT. Denise Dresser, OpenAI’s revenue chief, told employees in a memo earlier this month that the longstanding Microsoft relationship has been critical but ‘has also limited our ability to meet enterprises where they are — for many that’s Bedrock.’

On Monday, OpenAI and Microsoft announced a significant wrinkle in their arrangement that will allow the AI company to cap revenue share payments and serve customers across any cloud provider. Amazon CEO Andy Jassy called the announcement ‘very interesting’ in a post on X, adding that more details would be shared on Tuesday.

OpenAI and Amazon have been getting closer in other ways.

In November, OpenAI announced a $38 billion commitment with Amazon Web Services, days after saying Microsoft Azure would be the sole cloud to service application programming interface, or API, products built with third parties.

Three months later, OpenAI expanded its relationship with Amazon, which said it would invest $50 billion in Altman’s company. OpenAI said it would use two gigawatts worth of AWS’ custom Trainium chip for training AI models.

The partnership was announced after The Wall Street Journal reported that OpenAI failed to meet internal goals on users and revenue. Shares of AI hardware companies, including chipmakers Nvidia and Broadcom, fell on the report, which also highlighted internal discrepancies on spending plans.

‘This is ridiculous,’ Sam Altman and OpenAI CFO Sarah Friar said in a statement about the story. ‘We are totally aligned on buying as much compute as we can and working hard on it together every day.’

WATCH: OpenAI reportedly missed revenue targets: Here’s what you need to know