Company also agrees to crack down on those who ‘Zoombomb’ meetings
Zoom Video Communications Inc. has agreed to pay $85 million and improve its security practices as part of a preliminary settlement to a two-pronged lawsuit filed against it over privacy violations and so-called “Zoombombing.”
According to a federal court filing Saturday, Zoom’s paid subscribers who are part of the class action will receive 15% refunds or $25, whichever is greater, while Zoom’s free users can receive $15. Zoom ZM, -2.05% also agreed to give its employees specialized training on handling user data and privacy, to alert users when third-party data-sharing apps are used during meetings, and to develop user-reporting and security features to prevent unauthorized people from accessing meetings.
The settlement still must be approved by U.S. District Judge Lucy Koh of San Jose, Calif.
The lawsuit claimed Zoom improperly shared data without users’ consent with other companies, such as Facebook Inc. FB, -0.56%, Alphabet’s GOOGL, -0.77% GOOG, -0.97% Google, and Microsoft’s MSFT, -0.55% LinkedIn, and that it did not do enough to prevent “Zoombombing,” in which hackers disrupted meetings, often by posting pornography or racist language.
Zoom denied wrongdoing in the settlement, and said in a statement Sunday: “The privacy and security of our users are top priorities for Zoom, and we take seriously the trust our users place in us.”
Zoom shares are up 12% year to date, and up nearly 50% over the past 12 months, compared with gains of 17% and 34%, respectively, by the S&P 500 SPX, -0.54% over those periods.