Amazon agreed Wednesday to pay a $25 million civil penalty to settle Federal Trade Commission allegations it violated a child privacy law and deceived parents by keeping for years kids’ voice and location data recorded by its popular Alexa voice assistant.

Separately, the company agreed to pay $5.8 million in customer refunds for alleged privacy violations involving its doorbell camera Ring.

The Alexa-related action orders Amazon to overhaul its data deletion practices and impose stricter, more transparent privacy measures. It also obliges the tech giant to delete certain data collected by its internet-connected digital assistant, which people use for everything from checking the weather to playing games and queueing up music.

“Amazon’s history of misleading parents, keeping children’s recordings indefinitely, and flouting parents’ deletion requests violated COPPA (the Child Online Privacy Protection Act) and sacrificed privacy for profits,” Samuel Levine, the FCT consumer protection chief, said in a statement. The 1998 law is designed to shield children from online harms.

FTC Commissioner Alvaro Bedoya said in a statement that “when parents asked Amazon to delete their kids’ Alexa voice data, the company did not delete all of it.”

The agency ordered the company to delete inactive child accounts as well as certain voice and geolocation data.

Amazon kept the kids’ data to refine its voice recognition algorithm, the artificial intelligence behind Alexa, which powers Echo and other smart speakers, Bedoya said. The FTC complaint sends a message to all tech companies who are “sprinting to do the same” amid fierce competition in developing AI datasets, he added.

“Nothing is more visceral to a parent than the sound of their child’s voice,” tweeted Bedoya, the father of two small children.

Amazon said last month that it has sold more than a half-billion Alexa-enabled devices globally and that use of the service increased 35% last year.

In the Ring case, the FTC says Amazon’s home security camera subsidiary let employees and contractors access consumers’ private videos and provided lax security practices that enabled hackers to take control of some accounts.

Amazon bought California-based Ring in 2018, and many of the violations alleged by the FTC predate the acquisition. Under the FTC’s order, Ring is required to pay $5.8 million that would be used for consumer refunds.

Amazon said it disagreed with the FTC’s claims on both Alexa and Ring and denied violating the law. But it said the settlements “put these matters behind us.”

“Our devices and services are built to protect customers’ privacy, and to provide customers with control over their experience,” the Seattle-based company said.

In addition to the fine in the Alexa case, the proposed order prohibits Amazon from using deleted geolocation and voice information to create or improve any data product. The order also requires Amazon to create a privacy program for its use of geolocation information.

The proposed orders must be approved by federal judges.

FTC commissioners had unanimously voted to file the charges against Amazon in both cases.
…

The International Energy Agency says Chinese car manufacturers are emerging as a major force in the global electric car market, with more than 50% of all electric cars on roads worldwide now produced in China. Spain is the second-largest vehicle manufacturer in Europe after Germany and its market has become a target for Chinese automakers. From Barcelona, Alfonso Beato has this report, narrated by Marcus Harton.
…

The semiconductor trade war between Washington and Beijing may ensnare Seoul as South Korea must decide between backing its closest ally or embracing a lucrative export opportunity presented by China, its top trading partner. 

The decision will reveal how closely South Korea is aligned with the U.S., its second-largest export market, experts said. 

The dilemma facing Seoul emerged after China announced that it was banning the use of U.S.-based Micron Technology’s broad range of computer memory and storage technologies. 

Liu Pengyu, a Chinese Embassy spokesperson in Washington, told VOA’s Korean Service on May 24 that Beijing’s cybersecurity regulators had assessed that Micron’s chips “pose a major security risk to China’s key information infrastructure supply chain and impact China’s national security.” 

The ban echoed that set by the U.S. on China’s Huawei Technologies in May 2019, when the Trump administration cited security concerns related to the company’s wireless networking equipment, especially those related to 5G. The Biden administration in November 2022 banned approvals of new telecommunications equipment from Huawei and ZTE because the products pose “an unacceptable risk” to U.S. national security.

U.S. Representative Mike Gallagher, the Republican chairman of the House Select Committee on Strategic Competition between the United States and the Chinese Communist Party, has called for South Korea to “act to prevent backfilling” the market gap left by Micron.

Litmus test

The U.S. has been trying to block China’s access to the technology needed to make advanced chips that can be used to modernize its military. Micron’s chips are used by Chinese industries that assemble consumer electronics such as smartphones. Although Beijing is funding the development of home-grown advanced chips such as those used in artificial intelligence applications, China’s chipmakers, for now, manufacture simpler products such as those used in home appliances.

Seoul’s decision on whether to dissuade its top chipmakers such as Samsung or SK Hynix from selling chips to China could indicate how closely South Korean President Yoon Suk Yeol is aligned with Washington. 

“This would certainly be a litmus test to see if Seoul and other allies are willing to support Washington’s policies designed to slow China’s technology growth,” said Andrew Yeo, the SK-Korea Foundation chair in Korea Studies at Brookings Institution.

Robert Rapson, who served as charge d’affaires and deputy chief of mission at the U.S. embassy in Seoul, 2018-2021, said, “This is the first real test of the Yoon administration’s policy of enhanced alignment with the U.S. on China.” 

He continued, “In other words, will [South] Korea sacrifice core economic, commercial interests of its flagship high-tech companies in keeping with [Washington’s] policy and U.S. wishes?”

He added that Seoul has the right to seek “some credit or offset” from Washington if it blocks backfilling the Micron gap. 

A business decision

A spokesperson for the South Korean Foreign Ministry told VOA’s Korean Service on Tuesday that the government “plans to continue efforts to protect the interest of our companies through cooperation with relevant agencies and engagements with diplomatic missions abroad.”  

South Korea sent 55% of its semiconductor exports to China last year even as  

its semiconductor exports have been in a steep decline since August 2022, according to a Bank of Korea report released on Tuesday, cited by Business Korea.

Robert Manning, a senior fellow at the Stimson Center’s Reimagining U.S. Grand Strategy Project, said “As the security environment in Northeast Asia has become fraught with North Korea’s provocative nuclear efforts and Chinese economic coercion, the U.S.-ROK alliance has become more vital to Seoul.” South Korea’s official name is the Republic of Korea (ROK).

“South Korea will [need to] sacrifice to a degree to sustain broad alignment with the U.S.,” Manning said. “But South Korea has its own interests so there are likely to be limits.” 

Troy Stangarone, senior director at Korea Economic Institute, said, “While China might face short-term shortage in chips if Samsung and SK Hynix withheld capacity, the ultimate result would only be the further expansion of domestic Chinese semiconductor firms which undermine U.S. long-term goals and potentially the very firms the United States is working with to improve its own supply chains.”

Dennis Wilder, senior director for East Asia affairs at the White House’s National Security Council during the George W. Bush administration, said, “This is a business decision, and it really should, in my view, be left to the South Korean companies to make this business decision.”  

Wilder continued, “But it’s far more important for South Korea to align with the United States on the very high-end semiconductor chips and the attempts to keep things out of the hands of the Chinese military that can help modernize.”  

Beijing’s ban came on the last day of the Group of Seven countries summit on May 19-21. The group agreed to de-risk the global economy and diversify trade away from China in an effort to counter its economic coercion. This is defined as “a threatened or actual imposition of economic costs by a state on a target with the objective of extracting a policy concession,” according to testimony by Bonnie Glaser, managing director, of the German Marshall Fund Indo-Pacific program, before the Congressional-Executive Commission on China.

U.S. Commerce Secretary Gina Raimondo said on Saturday that Washington “firmly opposes” China’s ban on Micron. She made the remark at a press conference held after the meeting of the U.S.-led Indo-Pacific Economic Framework (IPEF) that China sees as a body aimed at countering its economic rise. 

On Monday, an article in Chinese state-run media Global Times said it would be “natural” for South Korea’s chipmakers to export to fill the market void left by the Micron ban.

“There is no possibility for South Korea to replace its chips with other goods in its exports to China,” the report said. 

And on Sunday, Bloomberg quoted an unidentified source familiar with the situation as saying South Korea will veer away from supplying chips to China.

South Korea’s exports to China in April were $9.52 billion while exports to the U.S. reached $9.18 billion, according to the Trade Ministry’s latest data. The gap between South Korea’s exports to China and the U.S. narrowed to just $340 million in April from $1.15 billion in January driven by a strong dollar and EV demand.
…