Fri | Sep 24, 2021

Zoom to pay $85M for privacy issues at start of pandemic

Published:Monday | August 2, 2021 | 4:57 PM
This April 18, 2019, file photo shows a sign for Zoom Video Communications ahead of their Nasdaq IPO in New York. (AP Photo/Mark Lennihan, File)

Zoom will pay $85 million to settle a lawsuit alleging that weak privacy controls opened too many peepholes into the personal information of users and that it was too easy for outsiders to disrupt video meetings during the early stages of the pandemic.

The proposed agreement must still be approved by US District Judge Lucy Koh.

A hearing on the settlement is scheduled for October 21 in San Jose, California.

Millions of people in the US who have used Zoom since March 31, 2020, could be eligible for a slice of the settlement that was reached over the weekend.

The payment amounts are expected to average $34 or $35 for those who subscribed to Zoom's paid version, and $11 or $12 for the overwhelming majority who used the free version, based on estimates in court documents.

Zoom was bedevilled by security issues early last year after stay-at-home orders transformed the company's videoconferencing service from a niche product into a cultural phenomenon.

Almost overnight it became the go-to venue for business meetings, schools, social gatherings, and, in a deadly global pandemic, funerals.

The lawsuit alleged that the Silicon Valley company violated the trust of millions of people by sharing the personal information of users with platforms like Facebook, Google, and Microsoft-owned LinkedIn.

The case, which consolidated 14 different lawsuits filed since March 2020, also targeted the disruptive practice of “Combining” — a term coined to describe hackers who broke into videoconferencing meetings being held by others.

The company in a prepared statement Monday said that it acted quickly to tighten security after reports of Zoombombing began to surface.

“We are proud of the advancements we have made to our platform, and look forward to continuing to innovate with privacy and security at the forefront,” Zoom said Monday.

The company didn't acknowledge any wrongdoing in the settlement.

Security concerns did not prevent Zoom from permeating the daily lives of millions during the pandemic.

Zoom's annual revenue quadrupled last year to nearly $2.7 billion and it ended April with 497,000 customers that employed at least 10 workers and subscribed to the premium version of its service, up from 81,900 customers before the pandemic hit the US.

Its stock price has tripled and traded close to $380 Monday.

The lawyers that pursued the case are seeking $21.25 million, or 25% of the $85 million settlement fund.

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