Amazon Data Misuse Could Be Its Undoing, Lawsuit Alleges

Amazon Echo Dot feature

Amazon Echo Dot (Photo by Andres Urena on Unsplash)

An Amazon shareholder is suing founder and executive chairman Jeff Bezos, along with current CEO Andy Jassy, CFO Brian Olsavsky, other executives and the entire board of directors, claiming misuse of customer data could lead to widespread mistrust and wreck the company.

According to a lawsuit by shareholder Stephen Nelson, as reported by the Seattle Times, at least 14 class action lawsuits and 75,000 individual cases could lead to damages and judgements that are “astronomical to the point the company could be put out of business if the violations are not immediately addressed, stopped and remedied.”

In the lawsuit, the Seattle Times states, Nelson accuses Amazon’s leadership of misleading investors about how its alleged misuse of biometric data, and potential violations of Illinois’ Biometric Privacy Information Act, could lead to financial and legal risks.

Amazon’s use of consumers’ biometric data, captured through use of its Rekognition facial recognition technology as well as Alexa devices, and stored on Amazon Web Services, is the basis for much of the litigation it’s facing, the new lawsuit states. It also calls for the addition of experts in cybersecurity and consumer privacy to Amazon’s board of directors.

The board dismissed shareholder concerns about the risks of exposure to litigation, the lawsuit alleges, and the defendants signed off on “false statements” about Amazon’s compliance with state laws. This “jeopardizes and harms one of Amazon’s most important (and fragile) assets: consumer trust,” the lawsuit reads, according to the report. “Reputational damage is particularly devastating for technology companies like Amazon.”

Amazon, along with fellow “big tech” firms, Google parent Alphabet, Facebook and Apple, has been facing increasing pressure from Congress amid calls for their breakup due to allegations of monopolistic power. Separately, the Federal Trade Commission has been scrutinizing Amazon’s possible use of anti-competitive practices concerning its third-party sellers.