Is FTC Too Forgiving Of Amazon's Privacy Violations?

The commission finds that Amazon and one of its subsidiaries was deceptive, but chooses not to recommend enforcement action
A leading privacy advocate says the Federal Trade Commission's decision not to take action against for engaging in deceptive privacy practices sets a precedent that could ultimately hurt online retailing. In a recently completed investigation of Amazon and its Alexa Internet subsidiary, the FTC found Amazon and Alexa, which sells software designed to improve Web surfing, to be in violation of Section 5 of the FTC Act. Even so, it refrained from recommending any enforcement proceedings.

In a letter to Amazon detailing its findings, the FTC says the sites' practice of passing on consumers' personal data from Alexa to Amazon is in conflict with its previously stated policy. The commission says it chose not to take action in part because Alexa had amended its privacy policy. That policy now specifies that Alexa does not "intentionally disclose personally identifying information...even to" and that its processes eliminate "most, but not all" personal data. An FTC spokeswoman declined to elaborate on the letter.

Jason Catlett, president of privacy watchdog Junkbusters, has responded to the FTC's decision with a letter that asks the commission to order Amazon to submit to a privacy audit. Catlett says the FTC has traditionally been lenient on Amazon when it comes to privacy. Last week, the commission also rejected a petition from Catlett and the Electronic Privacy Information Center asking that it investigate alleged deception in Amazon's update of its privacy policy last year.

Catlett says that by not punishing Amazon and Alexa for either transgression, and allowing Alexa's subsequent policy update to affect that decision, the FTC could erode consumer confidence in E-commerce. "It sends a terrible message to companies that they can lie about their information practices, and that, if they're caught, they can change their practices," Catlett says. "Amazon can't be trusted." Amazon and Alexa did not return phone calls requesting comment.