Zoom has reached a £61.9m ($86m) settlement in a US class-action lawsuit over privacy issues. The lawsuit ‘alleged that Zoom had invaded the privacy of millions of users by sharing personal data with Facebook, Google and LinkedIn.’ Even though they have agreed to settle the company continues to deny any wrongdoing.

Zoom was initially released in 2012 but saw a huge boom in popularity during the pandemic, playing host to everything from pub quizzes to university lectures. The platform has been a powerful way to stay connected and the company has made billions of dollars during the pandemic. Zoom CEO Eric Yuan stated that ‘the sudden and increased demand on [Zoom’s] systems was unlike anything most companies have ever experienced’.

As the platform grew in popularity it also gained more attention from hackers who, thanks to the pandemic, now had even more time on their hands to exploit potential security flaws in the platform. It would seem that amidst Zoom’s surge in popularity the company failed to sufficiently tighten the net to keep these hackers out.

Settlement details

The lawsuit was filed on behalf of users across the US and originated amidst claims that Zoom was not doing enough to protect the privacy of users. As part of the settlement, Zoom will make changes ‘designed to improve meeting security, bolster privacy disclosures, and safeguard consumer data.’ These changes will include giving staff specialised training in data handling and privacy; the addition of this training is mildly alarming as it suggests the company was not offering this training to staff until now.

Interestingly, US-based users of the site between March 2016 and the date of the settlement will actually be able to access their share of the money. Users shouldn’t expect a large sum though:

‘If you had a paid account, you will get 15% of the money you paid for your subscription or $25, whichever is higher. If you used the free version, without a Zoom subscription, you may make a claim for $15.’

Users are eligible to claim this is because of the large amounts of disruption that has been caused to the user experience due to the gaps in Zoom’s security:

End-to-end encryption

The lawsuit also challenged Zoom’s claim that it offers end-to-end encryption. ‘Zoombombing’ issues have frequently made headlines throughout the pandemic with internet trolls managing to get onto high profile calls and share their screens. Sometimes these hackers will share silly videos simply to prove that they can, in other instances they share racist and potentially disturbing content.

Zoom cannot be held liable for the nature of the content as it was shared by third parties, but its presence is worrying. Not only is the content itself unpleasant to see, but it also highlights general privacy concerns about the platform. As the world moved online during the pandemic, things like court hearings and government meetings have been conducted over the software so it is concerning that it has been so easy for people to access and disrupt calls.

Amidst the lawsuit ‘Zoom agreed to security measures including alerting users when meeting hosts or other participants use third-party apps in meetings, and to provide specialized training to employees on privacy and data handling.’

What does this mean for Zoom?

The spotlight the lawsuit has shone on Zoom’s privacy weaknesses may make users less comfortable using the platform. Some institutions – including SpaceX and NASA – have already migrated over to other services such as Microsoft Teams or Google Meet due to Zoom privacy concerns. Google Meet has been described as secure by default thanks to built-in security features, making it the place more security-conscious users are likely to migrate to.

The company doesn’t seem too worried about the potential loss of users due to the lawsuit though. Zoom ‘is proud of the advances made on its platform and looks forward to more innovations with privacy and security in mind,’ the company said in a statement to USA TODAY. Again, though this seems positive it is concerning to see them only now adding security to their list of concerns when their platform has over 300 million daily meeting participants.

For many companies, a lawsuit of this size would spell the end. However, the large lawsuit settlement may not be as much of a financial hit for Zoom as it first appears, especially when you take their vast pandemic profits into consideration:

Zoom ‘ended the year with a net profit of $671 million, up from just $22 million in fiscal 2020. As of June 2, Zoom had a market capitalization of $96 billion, compared to $40 billion a year earlier.’ 

$86million is a staggeringly large sum but in the context of $671million net profit it becomes a far less shocking figure. Zoom can settle this lawsuit and still remain comfortably in the green for the year.

The company has been betting heavily on its platform remaining a fixture in the workplace beyond the end of the pandemic. Remote working options and hybrid office models seem to be here to stay; companies have found workers to be more productive, and the option for remote work offers much-needed flexibility for staff and adds accessibility options for people with disabilities.

Final thoughts

Zoom became a feature of all of our lives so rapidly that we did not stop to scrutinise the details of their privacy and data sharing rules. However, the responsibility for ensuring user information is safe does not fall on the shoulders of the consumer alone.

Zoom has seen such great financial success during the pandemic that it will be able to take this lawsuit settlement of $86million on the chin and even continue to lose a few million users and still not find themselves out of pocket. The company intends to improve its security, but it will be interesting to see whether people continue to make use of the platform in light of these newly apparent security risks.