The Otter.ai Lawsuit: Why Cloud Transcription Puts Your Data at Risk

The Privacy Wake-Up Call

In August 2025, Otter.ai was hit with a class action lawsuit alleging violations of Illinois' Biometric Information Privacy Act (BIPA). The allegations were serious: the company had allegedly been collecting, storing, and using biometric voice data without proper user consent.

This lawsuit isn't just about one company—it's a warning sign for anyone who uses cloud-based transcription services. Your voice recordings contain uniquely identifiable biometric data, and once that data leaves your device, you lose control over how it's used.

What the Lawsuit Alleges

The class action complaint against Otter.ai raises several concerning allegations:

Biometric data collection without consent: The lawsuit claims Otter.ai collected voiceprints—unique biometric identifiers derived from users' voices—without obtaining proper informed consent.
Data used for AI training: According to the complaint, user voice data may have been used to train machine learning models, potentially generating commercial value from users' biometric information.
Inadequate data protection: The suit alleges that Otter.ai failed to implement adequate protections for the sensitive biometric data it collected.
Third-party data sharing: The complaint suggests that voice data may have been shared with third parties without user knowledge or consent.

Hidden Risks of Cloud Transcription

The Otter.ai lawsuit highlights risks that apply to virtually all cloud-based transcription services:

1. Your Voice Is Your Biometric Identity

Unlike a password, you cannot change your voice. Voice biometrics—the unique patterns in how you speak—are permanent identifiers. Once a company has your voiceprint, they have a piece of your biometric identity forever.

2. Data Breaches Are Inevitable

Healthcare data breaches exposed over 51 million records in 2024 alone. Cloud transcription services holding millions of voice recordings are prime targets for attackers. If a breach occurs, your voice data could be exposed permanently.

3. Subpoena Risk

Any data stored on a company's servers can potentially be subpoenaed. For professionals bound by confidentiality—therapists, lawyers, doctors—this creates serious liability. Client conversations stored on third-party servers aren't truly confidential.

4. AI Training Without Consent

Many tech companies use user data to train AI models. Your private conversations could be feeding algorithms that generate commercial products—without your knowledge or compensation.

Why Offline Eliminates These Risks

When transcription happens entirely on your device, these risks simply don't exist:

No servers = nothing to breach: If your data never leaves your device, there's no server database for hackers to target.
No voiceprints stored externally: Your biometric data stays under your physical control.
Nothing to subpoena: Courts cannot compel a company to produce data they don't have.
No AI training fodder: Your conversations remain private, not training material.

The Apple Intelligence Difference

Apple Intelligence, which powers apps like Private Notes, processes everything directly on your iPhone. This isn't just a privacy feature—it's a fundamentally different architecture:

Transcription happens using Apple's on-device speech recognition
AI summaries are generated locally using Apple Intelligence
No internet connection is required for core functionality
Apple has no access to your recordings or transcripts

This approach aligns with Apple's broader privacy philosophy, which treats user data as off-limits to everyone—including Apple itself.

Who Should Care Most

While everyone benefits from private transcription, certain professionals face particular risks from cloud services:

Therapists and Counselors: Client session recordings contain extremely sensitive PHI (Protected Health Information). Cloud storage creates HIPAA compliance concerns and confidentiality risks.

Lawyers: Attorney-client privilege depends on communication confidentiality. Third-party server storage undermines this privilege.

Healthcare Providers: Patient encounters documented via cloud transcription create compliance and liability exposure.

Journalists: Source confidentiality is foundational to investigative journalism. Cloud-stored conversations with sources could be subpoenaed or breached.

Business Executives: Strategy discussions, M&A conversations, and sensitive business communications shouldn't live on third-party servers.

How to Verify Any App Is Truly Offline

Don't take marketing claims at face value. Here's how to verify an app actually works offline:

Enable Airplane Mode: Put your phone in airplane mode and try all features. True offline apps will work perfectly.
Check network activity: On iOS, go to Settings → Privacy & Security → App Privacy Report to see what network connections apps make.
Read the privacy policy: Look for specific statements about where data is processed and stored. Vague language like "we take your privacy seriously" without specifics is a red flag.
Verify the architecture: Apps using Apple Intelligence explicitly process data on-device. Cloud AI services require server connections.
Test with no internet: Try the app without WiFi or cellular data. If features fail, they're cloud-dependent.

The Otter.ai lawsuit is a reminder that convenience often comes at the cost of privacy. As AI transcription becomes ubiquitous, choosing tools that respect your data sovereignty isn't just prudent—it's essential.

Your voice is uniquely yours. It shouldn't become training data for someone else's AI model. It shouldn't sit on servers waiting to be breached or subpoenaed. It should stay exactly where it belongs: under your control, on your device.