Zoom Reaches $85M Settlement In Lawsuit Over User Privacy
Zoom Video Communications Inc (NASDAQ: ZM) has agreed to pay $85 million to settle a lawsuit claiming it violated users' privacy rights, Reuters reports. According to the lawsuit, Zoom was sharing personal data with Facebook Inc (NASDAQ: FB), Alphabet Inc’s (NASDAQ: GOOGL) Google, and Linkedin, and letting hackers disrupt Zoom meetings in a practice called "Zoombombing."
In Zoombombing, outsiders hijack Zoom meetings, display pornography, use racist language, or post other disturbing content.
According to CBC News, the lawsuit alleges that the company did not clarify its data-sharing practices to its users.
The settlement includes $25 million that will be given to Zoom subscribers covered by the lawsuit, and the $15 million will be given to those who cannot submit a paid subscription claim.
As per the settlement, subscribers would be eligible for 15% refunds on their core subscriptions or $25. Others may receive up to $15.
The plaintiffs' lawyers were aiming to get $21.25 million for legal fees. However, they mentioned that the $85 million settlement reasonable given the litigation risks.
The settlement needs approval from US District Judge Lucy Koh before it can get finalized.
Zoom has collected about $1.3 billion in Zoom Meetings subscriptions.
Zoom had 497,000 customers in April 2021, up from 81,900 in January 2020.
Last year the Federal Trade Commission (FTC) announced a settlement with Zoom requiring the company to implement a robust information security program.
The FTC alleged that Zoom misled users by touting the company offered “end-to-end, 256-bit encryption” to secure users’ communications when it provided a lower level of security.
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