Third Parties are companies or organizations that are not directly part of your interaction with the Smart Speaker. One example would be the use of the music streaming service Spotify. If you make the voice command to play a certain song using your Smart Speaker, part of the data gathered about that inquiry is passed on from your Smart Speaker manufacturer to Spotify. The data handed over depends on the service you use and might include meta-data like your location and IP-address and transcripts of your voice command.
How exactly the communication between the manufacturer and the third party takes place, depends on the Smart Speaker you are using. However, all data gathered is always first transmitted to the servers of the manufacturer. There it will be decided if the user asked for the services of another company. If this is the case, the manufacturers’ servers are sending a request to the servers of the relevant party. They receive the wanted data and sent it back to the user.
Enabling services of third parties on a Smart Speaker allows the manufacturer to offer a broader variety of features. Since companies, like Spotify, have an interest in gathering data about their users as well, they only offer their services to the manufacturers if they can benefit from it. Understanding how you use the services of other companies also allows the manufacturer to build a better profile about you regarding your preferences and habits. This, in turn, enables them to create more accurate personalized advertisements.