Zoom Video Communications (NASDAQ: ZM), the company behind a videoconferencing platform that attracted a lot of attention during the COVID-19 pandemic, was hit by a lawsuit by one of its investors.
First spotted by Bloomberg, the complaint, filed this week in federal court in San Francisco, accuses Zoom of having hidden flaws in its application, which led to breaches of privacy and security.
Investor Michael Drieu has accused senior executives of the company of hiding gaps in encryption and sharing of personal information with Facebook (NASDAQ: FB) and other third parties. The investor argued that the revelations about Zoom’s flaws had caused a severe blow to the share price. It is even then that equities have increased by almost 75% since the start of the year.
Since companies started ordering employees to work from home, schools have closed and cities in the United States have started calling people to stay at home, demand for Zoom has exploded. But it has also led to several loose security reports, privacy concerns, and hackers interrupting meetings, all due to weak encryption technology. These complaints prompted the New York City Department of Education to ban the use of the Zoom app in classrooms and prompted New York Attorney General Letitia James to request more information. on corporate security and privacy controls. Taiwan became the first government to ban any official use of the video conferencing application on Tuesday after learning that Zoom traffic was accidentally routed to China.
Zoom has attempted to respond to the criticism, with CEO Eric Yuan saying in a recent blog post that the company would spend the next 90 days better identifying, solving, and resolving issues with the platform. “Over the past few weeks, supporting this influx of users has been a huge undertaking and our only goal,” wrote Yuan. “However, we recognize that we have not met the expectations of the community – and ours – in terms of privacy and security.”