Zoom agrees to $85m payout over privacy scandals and pledges to make its platform safer

The plaintiffs allege that Zoom misled its users about the security of its encryption technology security and that it improperly shared their data

Zoom agreed to implement new security integrations, including a 'suspend meeting' button and a feature to block users from specific countries. Reuters

Zoom Video Communications, the owner of the popular video conferencing application, agreed to pay $85 million to millions of users to settle a case stemming from privacy concerns and a number of hacking and video-crashing incidents.

The settlement, granted final approval by US Judge Laurel Beeler, of the Northern District of California, includes $21.2m in lawyer's fees.

The lawsuit alleged that Zoom misled its users about the security of its encryption technology security and that it shared their data through third-party software from companies like Facebook, Google and LinkedIn without their consent.

The users said Zoom also failed to protect their online meetings from being disrupted by hacking attacks, which are colloquially known as “zoombombings", the most infamous of which was a Bible class in San Francisco being interrupted by the sudden appearance of indecent content.

“Millions of Americans continue to use Zoom’s platform with the expectation that their conversations will be kept private and secure,” said Mark Molumphy, one of the lawyers representing Zoom in the case.

“This groundbreaking settlement will provide a substantial cash recovery to Zoom users and implement privacy practices that, going forward, will help ensure that users are safe and protected.”

San Jose, California-based Zoom exploded in popularity at the onset of the Covid-19 pandemic in 2020 as people were confined to their homes because of strict lockdown measures, forcing them to work and study from a distance.

The global video conferencing market was estimated at $9.2 billion in 2021, and is projected to grow to $22.5bn by 2026 at a compound annual rate of almost 20 per cent, according to research company Markets and Markets.

Major companies, including Google, Cisco and Microsoft, plus other hardware manufacturers, expanded their video communications offerings to keep up with demand.

The remote and hybrid working models have been deemed effective by a number of studies, and it is expected that even post-pandemic, the practice will widely remain in place.

Zoom did not immediately comment on the settlement. A representative reiterated the same statement it released last August when the company initially agreed to the payout.

“We take seriously the trust our users place in us. 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," it said.

Zoom also agreed to make amendments to its business model, including a process that gives users access to law enforcement agencies in the event of disruptions that involve illegal content. It will also implement a system that will track reports of meetings being crashed into.

New security integrations, including a “suspend meeting” button and a feature to block users from specific countries, will also be added.

“The case itself and the settlement that we’ve obtained ... I think will become a standard for other technology companies going forward,” Molumphy said, according to the Los Angeles Times. “It’s really important to have the technology down and the security down before you go to market.”