UPDATE 3-Amazon shareholders reject facial recognition ban as concern grows in U.S. Congress

By Jeffrey Dastin

(Adds wide voting margin, background on local regulation and other facial recognition vendors)

By Jeffrey Dastin

May 22 (Reuters) - Amazon.com Inc said shareholders rejected proposals to curb and audit its facial recognition service on Wednesday, just as members of Congress indicated there was bipartisan support to one day regulate the technology.

In the past year Amazon has found itself at the center of a growing debate over the use of facial recognition by governments, with critics warning of false matches and arrests and proponents arguing it keeps the public safe. Law enforcement in Oregon and Florida have used Amazon's face and image ID service, known as Rekognition.

With support from civil liberties groups, two non-binding proposals on facial recognition made it to the ballot ahead of Amazon's shareholder meeting on Wednesday. The world's top online retailer and cloud computing company had tried to stop the votes, but it was effectively overruled by the U.S. Securities and Exchange Commission.

The first proposal would have made the company stop offering facial recognition to governments unless its board determined sales did not violate civil liberties. A second would have requested a study by September of the extent to which Amazon's service harmed rights and privacy.

According to an Amazon spokeswoman, the resolutions failed by a wide margin. The vote breakdown will be disclosed at a later point in time.

Adding to shareholders' concerns was recent research that showed Amazon's technology struggled to identify the gender of individuals with darker skin, prompting fears that a faulty technology would put innocent people behind bars.

Amazon has defended its work and said all users must follow the law. It also added a web portal for people to report any abuse of the service https://pages.awscloud.com/rekognition-abuse.html.

The proposals faced an uphill battle. Amazon's board recommended against them, and Jeff Bezos, the company's chief executive and founder, controls 16 percent of its stock and voting rights.

Still, critics of the technology believed the vote was beneficial.

"This shareholder intervention should serve as a wake-up call for the company to reckon with the real harms of face surveillance and to change course," said Shankar Narayan of the American Civil Liberties Union of Washington state.

A key congressional committee also met on Wednesday in Washington, D.C., to discuss the civil rights impact of all facial recognition technology, not only Amazon's.

Responding to the shareholder vote, Democratic U.S. Representative Jimmy Gomez said, "that just means that it's more important that Congress acts."

Republican members of the committee expressed concern about U.S. citizens having their rights violated and their information shared with the likes of the FBI without elected officials' oversight. A second hearing on the topic is scheduled for June 4.

Any federal regulation would follow a major decision by San Francisco officials earlier this month to ban city personnel from using the technology. That contrasts with New York, Chicago and Detroit, where law enforcement have reportedly used facial recognition or acquired it with the hope of speeding up post-crime investigations.

Amazon is one of many facial recognition vendors, alongside France's Idemia, Japan's NEC Corp and Microsoft Corp , which has repeatedly called for regulation and said https://reut.rs/2IygqgS it turned down sales for human rights concerns.

Mark Meadows, a Republican, said it was time to start legislating.

"You've now hit the sweet spot that brings progressives and conservatives together," he said. (Reporting By Jeffrey Dastin in San Francisco; Editing by Meredith Mazzilli)