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Zoom Reaches $85M Settlement In Lawsuit Over User Privacy

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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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