Chinese firm Qihoo 360 Technology has shut down a website that was streaming live video from its cameras in schools, gyms and restaurants.
Many of those owning Qihoo cameras said they did not know the images were being publicly shared.
Some school streams came from cameras Qihoo gave out for free to let parents keep an eye on their offspring.
It had given some of these cameras to schools following news about an abuse scandal at a kindergarten in Beijing.
Bloggers were among the first to find out that streams of images from cameras were being made public without permission. Before Water Drop was shut down, the site hosted hundreds of streams from cameras in dance studios, infant schools, restaurants and playgrounds.
In a statement placed on the Water Drop homepage, Qihoo said it had been closed down because of “internal business adjustments”.
On a separate page, the company published an open letter in which it said not all the smart cameras it had sold were broadcasting live.
This function had to be switched on, it said, adding that it advised organisations to put up signs warning that the area was being live streamed.
It said that many people found it a useful way to advertise their business or the products they sell. Others were using cameras to monitor elderly relatives so they could quickly give aid if required.
In said it had shut down the streaming service in response to public criticism.
However, it added, it would continue to supply cameras to infant schools and kindergartens so parents could watch their children.