Zoom was sued last year for failing to plug the security holes in its video-conferencing platform through which personal data was being shared with third parties. The company has settled the lawsuit, pending approval from a judge, and will pay $85 million to affected customers and free users.
It seems Zoom did violate user privacy by sharing personal data with Facebook, Google, and LinkedIn now that the company has agreed to settle the class-action lawsuitOpens a new window filed against it for a significant amount of money. The settlement also takes into account the inaction of the San Jose-based company to control the nuisance created by unsolicited internet trolls that dropped in on meetings.
Zoom was sued as early as March 2020, right around the time COVID-19 was declared a global pandemic. This means users who used Zoom’s video conferencing services before the outbreak of the Wuhan virus and by extension, before the stratospheric growth it witnessed since are entitled to a piece of the settlement.
The lawsuit claimed that Zoom shared the personal information of users with third parties without user consent. It also emphasizes initiatives taken by Zoom, or lack thereof, relating to how well the company sprung into action to protect the security of users when ‘zoombombers’ were causing havoc across the platform.
Zoom is one of the major winners in the COVID-19 era, having registered a 2900% growth rate in users by March 10, 2021. The company, which was doing okay with 10 million users in December 2019, suddenly had 300 million daily meeting participants to cater to. Users included remote workers, students attending virtual classes, the casual user using the platform for personal/social chats, and everything in between.
This growth continued despite well-founded concerns over some of Zoom’s policies and inadequate security measures. So much so that the Zoom app became the most downloaded app globally in April, edging out TikTok. Yet, concerns remained including data routing policies through Chinese servers, lack of safeguards such as encryption, as well as lax access controls that resulted in zoombombing.
All of these are taken care of now, thanks to a slew of updates the company made over the past year but only after it was inconvenienced with increased regulatory scrutiny. Zoom made changes that enabled users to prevent zoombombing before it happened.
It should be noted that zoombombing, as disruptive as it was, doesn’t have the same legal ramifications as non-consensual data sharing under Section 230 of the federal Communications Decency Act, according to U.S. District Judge Lucy Koh.
Additionally, the company brought changes to the platform at the functional level to curb the menace under the 90-day security sprint it instigated. The backlash it received for the lack of end-to-end encryption (E2EE) for free users also drove the company to make E2EE an add-on feature for all Zoom users.
Later in August, the company announced it is suspending direct sales in China to self-isolating from one of its top markets. An average user may have no qualms about Zoom servicing the Chinese market as long as the basic security and functionality of the tool remain on spot. However, it is essential that the company takes a proactive approach when it comes to addressing shortcomings in the product instead of relying on the market to tell it what needs to be done.
See Also: Now You Can Play Games and ‘Zoom’ Call Without Missing Either
Zoom’s Settlement
The class-action lawsuit had more to do with Zoom misleading users by:
- Sending a users usage patterns to FacebookOpens a new window — even if the user is associated with any Facebook account
- Leveraging questionableOpens a new window app set up practices on macOS
- Secretly settingOpens a new window up a Zoom server on Macs
- Tracking attendeesOpens a new window when they click a window aside from the Zoom window
The issue garnered so much attention that leading companies such as Apple, Google, SpaceXOpens a new window , NASAOpens a new window , New York City’s Department of EducationOpens a new window , and the Taiwanese governmentOpens a new window banned Zoom’s use. Even the US Senate and the German Foreign Ministry restricted its use.
Zoom denies any wrongdoing on their part, naturally. The company said, “The privacy and security of our users are top priorities for Zoom, and we take seriously the trust our users place in us.â€
Zoom’s agreement to settle, which amounts to $85 million, is pending Judge Koh’s approval. The amount is dwarfed by $1.3 billion generated by paid customers of Zoom, let alone the company’s $118 billion market capitalizationOpens a new window .
If approved, all Zoom customers since March 30, 2016, not meeting participants, will be partially refunded with 15% of the subscription charges they paid or $25, whichever is higher. Others including free users who registered, used, opened, or downloaded the Zoom Meetings Application are eligible for a $15 payout.
Users need to look out for an email from Zoom. If Zoom hasn’t got in touch with you and if you feel you’re entitled, Zoom is setting up a settlement page http://www.zoommeetingsclassaction.com/ as well as an email address, phone number, and mailing address so users can contact the company.
The settlement also stipulates Zoom to notify users when other participants use third-party apps in meetings. Finally, Zoom will train its employees with a focus on privacy and data handling.Â
Closing Thoughts
Zoom is in the big league now. In September last year, Zoom surpassed ExxonMobil and the world’s seven largest airlines in terms of market capitalization. The company’s current valuation hovers just belowOpens a new window that of Snapchat, Square, and even the 110-year old IBM, and is significantly higher than that of Snowflake, Atlassian, Airbnb, etc.
Besides a possible call center venture post the Five9 acquisitionOpens a new window , the video-conferencing provider is also looking to build a developer ecosystem complete with collaborative and entertainment elements for meeting participants. The Zoom platform, which now includes third-party app integrations as well as its own app marketplace, is riding on the scale it has managed to achieve since March last year.
Only Microsoft and Cisco are ahead, and we don’t mean by the sheer number of users, but by the market clout the two possess over Zoom. And if Zoom is serious about overtaking Microsoft Teams and Cisco Webex, it needs to ensure the products are rock solid before the world takes notice.
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