Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
American communications technology company Zoom Video Communications Inc (NASDAQ: ZM) has agreed to an $85 million settlement to a class-action lawsuit in the United States. The lawsuit was centered on the violation of user’s privacy as the San Jose-based firm reportedly shared users data with Facebook Inc (NASDAQ: FB), Alphabet Inc (NASDAQ: GOOGL), and LinkedIn. […]
American communications technology company Zoom Video Communications Inc (NASDAQ: ZM) has agreed to an $85 million settlement to a class-action lawsuit in the United States. The lawsuit was centered on the violation of user’s privacy as the San Jose-based firm reportedly shared users data with Facebook Inc (NASDAQ: FB), Alphabet Inc (NASDAQ: GOOGL), and LinkedIn.
Data privacy breaches come off as one of the major threats to digital startups and companies today. With susceptibility to data leaks amongst the fears consumers have, a firm can easily lose trust as in the cases of such violation as Zoom was accused of. Beyond the broad data mismanagement, Zoom was also faced with Zoombombings, a situation in which hackers hijack Zoom meetings and post a number of disturbing contents including pornography, racist comments amongst others.
Pending approval from US District Judge Lucy Koh in San Jose, California, the preliminary settlement deal was filed on Saturday, July 31. Per the deal, Zoom subscribers drafted in the class action lawsuit will get a 15% refund on their main subscriptions or $25 depending on which is bigger. In addition, the videotelephony and online chat services provider said it will boost its security measures to prevent future Zoombombing attacks while also promising to train its employees on data handling and privacy amongst others.
“The privacy and security of our users are top priorities for Zoom, and we take seriously the trust our users place in us,” Zoom said in a statement issued on Sunday. “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 settlement which proves that the hanging court feud hovering over the firm will no longer be a worry, investors appear impressed as ZM shares are recovery from the 2.05% close on Friday. In today’s Pre-market, Zoom is up 0.21% to $378.90.
Zoom Settlement to Shield the Company from Poor Performance
The impact of lawsuits, especially the long protracted ones is usually damning for a company’s reputation which may impact greatly on its performance. The Zoom lawsuit, filed in March to have attained a swift settlement has been tagged as a promising step to shield the firm from poor performances owing to bad reputations.
The $85 million settlement has been adjudged fair by the plaintiffs’ lawyers, despite Zoom collecting as much as $1.3 billion in subscription fees from the clients. The lawyer’s position is based on litigation risks and the costs, as they are billed to collect legal fees to the tune of $21.25 million.
Zoom has come under fire prior to this time for the susceptibility of its platform security breaches. In response, the firm has improved and added end-to-end encryption options to its platform for users. This is aside from other numerous security upgrades through app updates. The settlement, as well as the improvements, will also help cushion the anticipated subscriber’s decline from its current 497,000 as many workers resume back to work.