1. Channel: Ecommerce & Digital

Amazon, Starbucks Accused In Suit Of Customer Data Misuse

The Seattle Times reports that Amazon and Starbucks have been accused in a lawsuit filed in New York City of “collecting customers’ personal information without first notifying them.”

The proposed class action suit hinges on a New York City law, the Biometric Identifier Information Law, “which requires businesses to tell customers if they are collecting personally identifiable information.”  Starbucks and Amazon teamed up several years ago to open a pair of stores using Just Walk Out technology, which “which uses machine learning paired with a network of sensors and cameras to track what customers pick up and charge them when they walk out, skipping the checkout line.”  The stores also use the Amazon One biometric payment technology.

The Times writes that “three New York residents are accusing Amazon and Starbucks of violating that law in a legal action they hope will grow to include most of the stores’ customers.

“The lawsuit focuses on Amazon and Starbucks because the partnership is one of the most prominent cases of Amazon’s contactless checkout technology in the city, said Peter Romer-Friedman, an attorney based in Washington, D.C., and representing the plaintiffs in this case. Amazon is promoting the use of this technology throughout the country.”

Separate lawsuits against Amazon and Starbucks were filed earlier this year, and this suit looks to consolidate and strengthen those cases.

Amazon’s defense is that “its technology does not collect biometric data that can be used to identify a specific shopper. Instead, it relies on broad, distinguishing features to differentiate between shoppers in the store at one time, the company said.  Amazon added that customers who use an app to enter the store agree to a privacy policy that allows Amazon to use cameras, sensors and other technology to gather information about their activity in the store.”

The Times notes that “though not related to biometric data like fingerprints and palm scans, Amazon came under fire over protecting customers’ privacy last month, as well. Amazon agreed to pay $30.8 million to resolve two cases brought by the Federal Trade Commission related to privacy lapses on its smart devices.

“In one case, the FTC alleged Amazon didn’t take steps to protect the privacy of users of its Ring video doorbell. In the second, the Justice Department, on behalf of the FTC, said Amazon’s Alexa-powered speakers collected information about children under the age of 13 without parental consent.”

KC’s View:

I’ve been to plenty of stores with Just Walk Out and Amazon One technology – including in New York City – and while I don’t remember specific signage about data collection, it always seemed sort of self-evident that they had to be collecting something about me in order to make the whole thing work.

I have no idea if the two companies will be found to be technically in violation of the law, or if this is just a cash grab.  But I’d like to point out that if any of those folks use an app to the subway, or an Uber or Lyft app to travel around the city, or EZPass on the city’s bridges and tunnels, their data also is being collected.  (Anybody who watches “Law & Order” knows this.)

Like it or not, data about our activities is being collected by everyone.  Amazon and Starbucks may not be complying with the law – and, to be clear, they should – but it doesn’t sound to me like they’re doing anything different from everyone else.  in fact, if you are a retailer and you are not capturing, tracking and using customer data in some way, you probably have a competitive disadvantage.

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