To resolve claims that its Alexa voice assistant violated children's privacy rights, Amazon will pay $25 million (£20 million).
Following accusations that it had ignored parental requests to delete Alexa recordings, the company agreed to make a payment to the US Federal Trade Commission (FTC).
Sensitive data was discovered to have been retained for years.
After granting employees unrestricted access to customer data, Amazon's Ring doorbell camera unit will also pay out.
A document submitted to federal court in the District of Columbia states that Ring will pay $5.8m to the authorities.
The FTC complaint about Alexa claims that Amazon "prominently and repeatedly assured [its users], including parents, that they could delete voice recordings collected" by the system.
The complaint claimed that the company did not follow this procedure and instead kept the data for years while using it for illegal purposes to advance the Alexa algorithm.
The FTC's Bureau of Consumer Protection director Samuel Levine accused Amazon in a statement of "misleading parents, retaining children's recordings indefinitely, and flouting parents' deletion requests.".
He continued, "The company sacrificed privacy for profits.".
The FTC claimed that Ring, which Amazon acquired in 2018, allowed "thousands of employees and contractors" to view recordings of customers' private spaces.
They could view and download private video files from customers for their own use, the body claimed.
According to a statement from Amazon provided to the BBC, "Ring promptly addressed the issues at hand on its own years ago, well before the FTC began its inquiry.".
However, the complaint claims that a staff member watched tens of thousands of video clips taken by female Ring camera users who "surveilled intimate spaces in their homes, such as their bathrooms or bedrooms.".
The worker was only stopped after a coworker noticed their actions, the report claimed.
Ring's disregard for security and privacy left customers vulnerable to snooping and harassment, Mr. Levine claimed. It is abundantly clear from the FTC's order that prioritizing profit over privacy is unwise. ".
"While we disagree with the FTC's allegations regarding both Alexa and Ring, and we categorically deny breaking the law, these settlements put these matters behind us," Amazon stated. " .
The business also stated that it would keep developing new privacy features for the benefit of its clients.
