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Zoom settlement of privacy suit covers some businesses

Smaller businesses could benefit from Zoom's recent class-action lawsuit settlement. However, the deal does not cover companies with enterprise licenses.

Small businesses could receive money from Zoom's recent settlement of a class-action privacy lawsuit. But the $85 million deal does not cover companies with an enterprise license for the video conferencing service.

The proposed agreement would end a 2020 suit accusing the company of lax security and falsely claiming it had end-to-end communication encryption. Zoom's security lapses led to uninvited people disrupting video meetings -- a phenomenon dubbed Zoombombing.

The complaint also claimed the company shared user data with Facebook without permission.

Zoom denied any wrongdoing in the settlement, filed July 31 in the U.S. District Court of Northern California. A judge will have to approve the deal.

In response to the settlement, Zoom released a statement saying it had improved the platform's security to safeguard user privacy.

"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.

Under the deal's terms, individuals and businesses with less than an enterprise account could receive a 15% refund or $25, whichever is greater. Zoom users with a free account are eligible for a $15 payment. However, the settlement excludes businesses with an enterprise account -- the highest plan tier.

Plaintiff lawyer Tina Wolfson said including enterprises in the suit would have complicated matters because Zoom customizes its services for large customers. That custom work would have made it difficult to prove the false security claims damaged enterprises.

"Such a claim would be much weaker when the client has sophisticated IT folks communicating with Zoom to make sure [the] service meets their standards," she said.

Zoom agreed to be more transparent with subscribers in its privacy statement about the use of their data. The company will provide in-meeting notifications when a participant uses a third-party application and disclose the parties with whom it shares data.

Zoom added end-to-end encryption to all subscriber communications last fall. Besides the class-action suit, the Federal Trade Commission filed a complaint against the company, accusing it of falsely claiming to have a high level of encryption since at least 2016. Zoom settled the complaint last November.

Mike Gleason is a reporter covering unified communications and collaboration tools. He previously covered communities in the MetroWest region of Massachusetts for the Milford Daily NewsWalpole TimesSharon Advocate and Medfield Press. He has also worked for newspapers in central Massachusetts and southwestern Vermont and served as a local editor for Patch. He can be found on Twitter at @MGleason_TT.

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