U.S. blocks Amazon efforts to stop shareholder votes on facial recognition

April 4, 2019

By Jeffrey Dastin and Ross Kerber

(Reuters) – U.S. securities regulators shot down attempts by Amazon.com Inc to stop its investors from considering two shareholder proposals about the company’s controversial sale of a facial recognition service, a sign of growing scrutiny of the technology.

Decisions including one on Wednesday by officials at the Securities and Exchange Commission (SEC) followed an unusual appeal by Amazon to block the non-binding proposals from being voted on at the company’s upcoming annual meeting.

One proposal would require Amazon to cease offering facial recognition to governments unless the company’s board determined sales did not violate civil liberties. A second would call for an audit to examine the harm to rights and privacy, if any, that might result from the service, known as Rekognition.

Both proposals face uphill battles to receive a majority of support from investors in the world’s largest online retailer and cloud computing company. Founder and CEO Jeff Bezos will retain voting rights over about 16 percent of shares after he and MacKenzie Bezos divorce, she said on Thursday. [nL1N21M1JB]

Amazon declined to comment on the SEC decisions. The company is one of many marketers of facial recognition technology and has disclosed sales to law enforcement and to private customers using the service for purposes such as identifying celebrities.

Civil liberties groups have raised concerns including findings by researchers that Amazon’s technology struggles more than some peers’ to identify the gender of individuals with darker skin, prompting fears of unjust arrests. Amazon has defended its work and said all users must follow the law.

Michael Connor, executive director of Open MIC, an advocacy group working with shareholders, including a religious order, who brought the resolutions, said the SEC decisions show the developing rules around facial recognition are “really a critical issue for a company like Amazon and how it handles the business risk associated with the technology.”

According to correspondence posted on the SEC website, Amazon had sought the regulator’s permission to skip the proposals as being insignificant to its business, among other things, but was turned down on March 28.

Amazon then took the unusual step of asking for a reconsideration of that decision, but was again rebuffed in a April 3 letter from the agency.

Other letters show the SEC gave Amazon permission to skip proposals for things like a risk oversight committee, and that Amazon resolved climate concerns raised by other investors.

(Reporting By Jeffrey Dastin in San Francisco and Ross Kerber in Boston; Editing by Daniel Wallis)

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