• by Wendy Davis , Staff Writer @wendyndavis, October 12, 2023

For more than 20 years online ad companies have relied on privacy policies to tell people that their online activity may be used for ad targeting purposes. And for nearly that long, observers have questioned the value of those documents -- which tend to be lengthy and filled with indecipherable jargon.

Now, a federal appeals court could soon decide whether the privacy policies used by one of the largest tech companies -- Amazon -- are too convoluted to protect it from a lawsuit over ad targeting. At least one industry observer, Utah State University marketing professor Aaron Brough, is siding against Amazon on that question.

“Simply stated, Amazon obfuscated the purposes for which it was using consumer data,” Brough said in papers filed this week with the 9th Circuit Court of Appeals.

The current court battle centers on a 2022 class-action complaint brought by Alexa users James Gray and Scott Horton who alleged Amazon's use of voice data for ad targeting violated users' privacy, and amounted to misleading and unfair conduct.

They sued soon after researchers from the University of Washington, University of California-Davis, University of California-Irvine, and Northeastern University posted the paper “Your Echoes are Heard: Tracking, Profiling, and Ad Targeting in the Amazon Smart Speaker Ecosystem,” which concluded that Amazon “processes voice data to infer user interests.”

That report doesn't allege that Amazon secretly listened to conversations, or directly shared voice recordings with third parties.

After the paper was posted, Amazon acknowledged it targeted ads to consumers based on their transactions with Alexa.

“Similar to what you'd experience if you made a purchase on Amazon.com or requested a song through Amazon Music, if you ask Alexa to order paper towels or to play a song on Amazon Music, the record of that purchase or song play may inform relevant ads shown on Amazon or other sites where Amazon places ads,” the company stated.

Amazon argued the lawsuit should be dismissed at an early stage because disclosed in a document titled “Privacy Notice” that transaction data can be used to target ads.

A trial judge agreed with Amazon and threw out the complaint.

Gray and Horton recently asked the 9th Circuit Court of Appeals to revive the case, arguing that other Amazon policies -- including Amazon's terms of use for Alexa and Amazon.com -- don't disclose that the company might harness voice commands for ad targeting. What's more, they say, Amazon told media outlets -- including NBC and The New York Times -- that Alexa doesn't use voice recordings for targeted advertising. 

On Wednesday, Utah State's Brough sided with Gray and Horton in a proposed friend-of-the-court brief.

“Amazon’s numerous disclosures fall far short of providing consumers with a clear, concise, and comprehensive set of terms of conditions relative to how its Alexa devise was programmed to collect verbal commands of consumers for the purposes of sending targeted advertising to consumers,” he argues. “By failing to comply with the above identified principles, Amazon failed to provide consumers with a clear understanding of the privacy risks they would face by using Alexa.”

Amazon is expected to file papers with the 9th Circuit later this month.