On Saturday, July 31, Zoom Video Communications Inc. agreed to settle the $85 million lawsuit that claimed the privacy rights of users had been violated.
The class-action suit was filed by multiple Zoom users who alleged their personal data had been shared with Facebook, Google, and LinkedIn and “Zoombombing,” which happened when outsiders were able to interrupt meetings with pornography, unwarranted language, or other inappropriate content, NPR reported.
The settlement still needs to be approved by U.S. District Judge Lucy Koh in San Jose, California.
If she approves the deal, subscribers in the proposed class action could get a 15% refund on their basic memberships or $25, whichever is greater. Zoom users who did not have to pay for an account can also get up to $15 redemption.
Zoom will also be obligated to shore up its security and guarantee that users will be notified if third-party apps may share their data and take further steps to protect customer data.
Accepting the settlement, Zoom, however, did not admit any wrongdoing.
“The privacy and security of our users are top priorities for Zoom, and we take seriously the trust our users place in us,” Zoom declared in a statement on Sunday, August 1.
“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,” the company added.
The plaintiffs’ attorneys said the $85 million settlement was appropriate as class members paid Zoom $1.3 billion in Zoom Meetings subscriptions. They said the lawsuit was facing high risks, and legal fees could cost up to $21.25 million.
On March 11, Judge Koh turned down significant claims in the proposed class action, including invasion of privacy, negligence, and violations of that state’s consumer and anti-hacking laws. Still, several contract-based allegations were able to proceed, per Reuters.
Over Zoombombing, the Judge said the company was mostly protected by Section 230 of the federal Communications Decency Act, which keeps online platforms from taking responsibility for user content.
“Appalling as this content is, Zoom’s failure to edit or block user-generated content is the very activity Congress sought to immunize,” Koh wrote.
Due to the airborne COVID-19 pandemic since last year that ensued lockdowns in many parts of the world, multiple organizations had to scale down to remote operations.
Zoom’s customer base, hence, has more than quadrupled since early last year. And since the World Health Organization declared a pandemic on March 11, 2020, the company’s stock has more than tripled in value.
By April this year, the company had 497,000 customers with more than ten employees, compared to 81,900 in January 2020. But Zoom anticipated that as more people get immunized and social distancing becomes obsolete, its user growth will stagnate or plummet.