Gray v. Amazon.Com, Inc.

653 F.Supp.3d 847

James GRAY and Scott Horton, individually andon behalf of others similarly situated, Plaintiffs, v. AMAZON.COM, INC., a Delaware corporation, and Amazon.com Services LLC,a Washington limited liability company, Defendants.

No. 2:22-cv-800-BJR

United States District Court, W.D. Washington, at Seattle

Signed January 26, 2022

Filed January 27, 2023

Adam J. Levitt, Pro Hac Vice, Nada Djordjevic, Pro Hac Vice, Sharon Cruz, Pro Hac Vice, Amy E. Keller, Pro Hac Vice, DiCello Levitt Gutzler LLC, Chicago, IL, Corban S. Rhodes, Pro Hac Vice, David Straite, Pro Hac Vice, DiCello Levitt Gutzler LLC, New York, NY, Rebecca Luise Solomon, Jason T. Dennett, Tousley Brain Stephens PLLC, Seattle, WA, for Plaintiffs.

Armen Nercessian, Pro Hac Vice, Esther D. Galan, Pro Hac Vice, Garner Kropp, Pro Hac Vice, Jedediah Wakefield, Pro Hac Vice, Laurence F. Pulgram, Pro Hac Vice, Tyler G. Newby, Pro Hac Vice, Fenwick & West, San Francisco, CA, Brian D. Buckley, Yukiu Monica Chan, Fenwick & West, Seattle, WA, for Defendants.

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

Barbara Jacobs Rothstein, United States District Court Judge

I. INTRODUCTION

Plaintiffs James Gray and Scott Horton ("Plaintiffs") brought this putative class action against Defendants Amazon.com, Inc. and Amazon.com Services LLC (together, "Amazon" or "Defendants"), asserting various claims arising from Amazon's alleged use of voice data collected through its Alexa digital assistant software for purposes of targeted advertising. Presently before the Court is Defendants' motion to dismiss Plaintiffs' Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Dkt. 37. Having reviewed the pleadings, the record of the case, and the relevant legal authorities, the Court GRANTS the motion. The Court's reasoning is set forth below.

II. BACKGROUND¹

A. Factual Background

1. Alexa

Amazon's Alexa is a voice-activated digital assistant software that runs on various devices sold by Amazon - including the family of "Echo" smart speakers - and other companies with which Amazon partners. Compl. ¶¶ 15-17. Alexa-enabled devices, all of which contain a microphone, perform a wide range of functions that are prompted by users' voiced commands and questions, such as turning on a television program, obtaining the day's weather forecast, and making purchases from Amazon.com. Id. ¶¶ 18-19. To interact with Alexa, a user must first say the "wake word" - which is "Alexa" - before speaking aloud their inquiry or command (e.g., "what is the weather in Seattle tomorrow?"). Id. ¶ 18. Alexa will then respond with an audible answer or by performing the user's command. Id. For example, to place an order for orange juice on Amazon.com, a user may say, "Alexa, order more orange juice." Id. ¶ 19. Today, there are more than 40 million Alexa-enabled devices operating within the United States. Id. ¶¶ 16, 20.

2. Terms Governing Alexa's Use

In addition to the Alexa Terms of Use (the "Alexa Terms"), which contain the primary terms and conditions governing Alexa's use (Declaration of Brian Buckley (Buckley Decl., Dkt. 38), Ex. A), Amazon relies on numerous other policies to set forth terms addressing specific aspects of Alexa and Alexa-enabled devices. Compl. ¶ 35.² Plaintiffs point to the "Alexa and Alexa Device FAQs" (the "Alexa FAQs") and the Amazon Device Terms of Use (the "Amazon Device Terms") as explaining, in part, the features and functionality of Alexa and Alexa-enabled devices. The Alexa FAQs state, in relevant part:

Alexa uses your voice recordings and other information, including from third-party services, to answer your questions, fulfill your requests, and improve your experience and our services. We associate your requests with your Amazon account to allow you to review your voice recordings, access other Amazon services (e.g. so you can ask Alexa to read your Kindle books and play audiobooks from Audible), and to provide you with a more personalized experience.

Id. ¶ 36. Similarly, the Amazon Device Terms explain:

Your Amazon Device may have features that allow you to access Alexa voice services or otherwise use your voice to perform certain tasks, such as check the weather, add a calendar entry, perform a search, or operate other connected products. When you use voice services, we may process your voice input and other information (such as location) in the cloud to respond to your requests and to improve your experience and our products and services.

Id. ¶ 38.

The Alexa Terms expressly incorporate the Amazon.com Privacy Notice (the "Privacy Notice"),³ which describes Amazon's practices of collecting and using personal information across its services and products. Buckley Decl., Ex. B. That notice, which is discussed in greater detail below, states in its preamble: "We know that you care how information about you is used and shared, and we appreciate your trust that we will do so carefully and sensibly." Compl. ¶ 113; Buckley Decl., Ex. B at 1. The Privacy Notice also states that Amazon "use[s] your personal information to display interest-based ads for features, products, and services that might be of interest to you." Buckley Decl., Ex. B. at 2 (emphasis added).⁴

3. Amazon's Public Statements Concerning its Use of Voice Recordings and Plaintiffs' Allegations as to Subsequent Revelations

Plaintiffs allege that Amazon, over the course of several years, has consistently denied that it collects and uses Alexa users' voice data in order to serve targeted advertisements to them. Plaintiffs point, specifically, to three separate statements, made by Amazon spokespersons between 2017 and 2019 in response to media reports about Alexa, that Amazon does "not use customers' voice recordings for targeted advertising." Compl. ¶ 26 (2017 statement to local news station); id. ¶ 27 (2018 statement responding to New York Times article); id. ¶ 28 (2019 statement responding to NBC report). Plaintiffs also point to a 2020 on-air CNBC interview, during which Amazon's Senior Vice President of Devices and Services stated, in response to a question about whether Amazon was using Alexa-generated data for advertising purposes, that Amazon was "not experimenting with [targeted advertising] yet." Id. ¶ 29.

Plaintiffs claim that, contrary to Amazon's repeated denials, Amazon has been employing Alexa-captured voice data in its Demand Side Platform ("DSP"), which Plaintiffs allege is a service Amazon offers to third-party advertisers that "leverage[s] all of the data Amazon collects about its customers in order to sell targeted advertising . . . based on that data." Compl. ¶¶ 45-50.⁵ Plaintiffs allege that the truth was revealed by a research paper entitled, Your Echoes are Heard: Tracking, Profiling, and Ad Targeting in the Amazon Smart Speaker Ecosystem (the "Research Paper"), that was published in April 2022 by a group of university researchers. See Umar Iqbal, et al., Your Echos are Heard: Tracking, Profiling, and Ad Targeting in the Amazon Smart Speaker Ecosystem, ALEXAECHOS.COM, https://arxiv.org/pdf/2204.10920.pdf (rev. May 11, 2022). The researchers conducted a series of experiments in which they exposed different "interest personas" (i.e., simulated persons having unique interests, such as fashion) to Alexa through separate Echo devices, and then observed, among other things, the advertisements displayed to each of them relative to those displayed to simulated "control personas." Id. While the Research Paper does not find any evidence that Amazon is sharing voice recordings or transcripts thereof with advertisers, it concludes that "Amazon processes voice data to infer user interests and uses it to serve targeted ads on-platform (Echo devices) as well as off-platform (web)." Id. at 1, 11-12, 16.

Following the Research Paper's publication, Amazon issued a press statement outlining its use of transaction data generated through Alexa for purposes of targeted advertising. Compl. ¶ 32. The statement explained, by way of example:

[S]imilar 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.

Id. Thus, Defendants' position is that Amazon uses the records of Alexa users' transactions to inform advertisements displayed to them, but does not use recordings of Alexa users' questions or commands - i.e., their "voice recordings" - for that purpose.

B. Procedural Background

Plaintiffs, both of whom own and use Alexa-enabled devices, filed this lawsuit on June 8, 2022 as a class action on behalf of "[a]ll persons residing in the United States who are registered users of an Alexa-Enabled Device and have been served targeted advertisements by Amazon through its DSP." Compl. ¶ 94. On August 12, 2022, Defendants moved to dismiss the Complaint pursuant to Rule 12(b)(6) of the Rules of Federal Procedure. Plaintiffs opposed the motion (Dkt. 41 ("Opp.")), and Defendants replied (Dkt. 43 ("Rep.")).

III. STANDARD OF REVIEW

A motion to dismiss for failure to state a claim under Rule 12(b)(6) is properly granted if the complaint does not "contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). The plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "A complaint may fail to show a right to relief either by lacking a cognizable legal theory or by lacking sufficient facts alleged under a cognizable legal theory." Woods v. U.S. Bank N.A., 831 F.3d 1159, 1162 (9th Cir. 2016). When considering a motion to dismiss under Rule 12(b)(6), courts must accept the...