The car is no longer usable without the wheels, I believe the argument for Alexa would be that the core functionality is still usable without the privacy setting.
I don't see why we would need the FTC to fix this. If someone bought Alexa from Amazon and honestly expected it to be privacy focused, they just made a mistake and can learn from it. Problems don't always have to be solved by running to the biggest authority that can be found and demanding they solve it for you.
"Do not send voice recordings" back to Amazon HQ =/= "privacy focused." It's arguably a necessary feature for minimal privacy in one's home, and I expect that a lot of people bought those devices with that in mind.
If the FTC doesn't fix this kind of spontaneous downgrade, I'm not sure what they're for at all.
If somebody falls for a criminal's fraud, I suppose "they just made a mistake and can learn from it"? No need for anybody else, or any authority, to do anything?
Jumping to criminal fraud feels a bit hasty in this context. It'd be important to know whether Amazon ever marketed this feature specifically, promised privacy, defined what that privacy they promised meant, and whether there's any legal argument to be made that this setting should be considered core to the basic functionality of Alexa.
IMO no one should have ever expected Alexa, or products like it, to be private. The meet fact that it has a microphone, and potentially a camera, and promises to respond simply by you saying something to it means they're always listening. I don't really care what they say they'll do with the recordings, I care what they can do with the recordings without me ever knowing about it.
I don't see why we would need the FTC to fix this. If someone bought Alexa from Amazon and honestly expected it to be privacy focused, they just made a mistake and can learn from it. Problems don't always have to be solved by running to the biggest authority that can be found and demanding they solve it for you.