Amazon was also hit with a second fine over Ring, its home surveillance company

More than 800,000 children under the age of 13 have their own Alexa profiles, according to the lawsuit filed by the Justice Department on behalf of the Federal Trade Commission. The voice assistant is especially popular with young children who can’t read but can access information and entertainment by talking to the device.

By recording children and using transcripts of those recordings to improve its product even after deletion requests, the U.S. government alleges that Amazon has violated the Children’s Online Privacy Protection Act of 1998, a law that has recently been enforced against other popular tech companies including Fortnite-maker Epic Games and YouTube.

The commission is also fining the company over Ring, Amazon’s home surveillance company best known for its doorbell camera. Regulators say the company illegally allowed employees and contractors to view private videos of customer’s homes and are fining the company an additional $5.8 million.

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“At Amazon, we take our responsibilities to our customers and their families very seriously,” said Amazon spokeswoman Parmita Choudhury in a statement. “Our devices and services are built to protect customers’ privacy, and to provide customers with control over their experience. While we disagree with the FTC’s claims regarding both Alexa and Ring, and deny violating the law, these settlements put these matters behind us.”

Choudhury said Amazon agreed to “remove child profiles that have been inactive for more than 18 months” as part of the settlement, and worked with the FTC to expand a compliant program called Amazon Kids. Regarding Ring, she said Amazon addressed privacy problems “before the FTC began its inquiry.”

Amazon founder and former CEO Jeff Bezos owns The Washington Post.

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Federal regulators said the case against Amazon is intended to send a signal to all tech companies that are racing to use mass data to refine AI models, as the recent release of ChatGPT sparks an AI arms race in Silicon Valley.

“Machine learning is no excuse to break the law,” said commissioner Alvaro M. Bedoya, in a statement joined by FTC Chair Lina Khan (D) and commissioner Rebecca Kelly Slaughter. “Claims from businesses that data must be indefinitely retained to improve algorithms do not override legal bans on indefinite retention of data.”

The $25 million fine is significantly smaller than penalties other tech companies have paid federal regulators for privacy transgressions against children, but it is representative of the FTC’s broad scrutiny of Amazon’s sprawling businesses.

The FTC for years has also been investigating Amazon for potential violations of U.S. antitrust laws, in a wide-ranging case that opened under the Trump administration in 2019. That potential case is being closely watched as a bellwether of Khan’s ability to rein in the power and influence of the tech industry. The prominent tech critic rose in notoriety for an academic paper she wrote in the Yale Law Journal called “Amazon’s Antitrust Paradox,” which criticized the company’s dominance.

The action against Amazon had support from FTC commissioners from both parties, including former commissioner Christine Wilson (R), who voted on the complaint before departing the agency earlier this year.

Politicians from both parties have increasingly signaled an interest in protecting children online, calling to update the 1998 COPPA law for the modern internet and grilling tech executives on their safeguards for minors. Yet multiple bipartisan bills focused on children’s privacy and safety have languished in Congress.

In the absence of action in Washington, state legislatures have recently become more active in passing laws intended to keep children safe online.

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California last year passed the Age Appropriate Design Code, which would require companies to consider children’s safety in the design of their products. NetChoice, an industry group that counts Amazon as a member, has sued to block the law from taking effect. A patchwork of state laws governing kids’ time online is emerging, as Utah and Arkansas adopt laws that requires social media sites to verify the ages of users.