High-Flying Zoom Faces Class-Action from Consumers for Data Sharing

Zoom has been one of the companies that have dominated headlines during the COVID-19 crisis is the virtual meeting company Zoom. Entire companies and educational organizations are operating by conducting their business over the software. However, some of the news headlines have also been unwelcome for Zoom. The company is now being sued for sharing its users' personal data with Facebook. The plaintiffs claim that Zoom is benefiting financially from this breach of their privacy and are seeking damages.

Zoom meetings have become a staple of the COVID-19 crisis and will continue for the foreseeable future as nearly the entire country is under a stay-at-home order. As a result of the increased usage of its product and the heightened media attention, Zoom has seen its stock price more than double while the shares of nearly every other company have plummeted. However, the plaintiffs have taken issue with some of the ways that the company earns its profits.

Zoom Collects a Variety of Information and Shares it with Facebook

The plaintiffs allege that Zoom begins collecting personal information the minute that users sign up for the service and log into the system. The lawsuit alleges that Zoom does not inform users that it is engaging in information collecting efforts. Users are not given a way to consent to information gathering.

Zoom claims that it takes steps to protect the privacy of its users and information. The company has a privacy policy that informs users of the extent of information collection. However, the lawsuit alleges that Zoom goes beyond this policy to share users' information. Whether it is by design or by a defect in the system, Zoom ends up sharing its users' data with Facebook and other third-party apps.

Facebook receives much information on the user's experiences such as the time that they log in, the device that they are logging in from and even the city from which they are using Zoom. This allows advertisers to better target Zoom users with specific pitches for their products. In exchange for the data, Zoom presumably receives money from Facebook and the other apps. This was revealed to the public in a March 26 news article. The information in the article was verified by a leading privacy expert.

Zoom itself admitted on its website that it was sharing certain information with Facebook. After the story was published, Zoom released a new version of its software that does not allow for information sharing with Facebook. However, users still need to affirmatively turn off information sharing to protect their privacy by updating their app.

However, many users are very sensitive to their personal information being shared with third parties. Some would not be using Zoom had they known that their information was being given out for profit. Thus, the plaintiffs claim that Zoom made a material misrepresentation when users signed up for its product.

The Lawsuit Alleges Numerous Violations of California Law

The lawsuit was filed in California and alleges that numerous state laws were violated. California has a new consumer privacy law that went into effect on January 1, 2020. It prohibits the collection of personal information without first informing consumers that their data is being collected. According to the plaintiffs, California law was further violated by the fact that the defendants failed to prevent nonencrypted and nonredacted personal information from being released. The plaintiffs are seeking an injunction along with a monetary award of $750-$1,000 for each consumer whose personal information was compromised.

The plaintiffs also claim that Zoom engaged in unfair and fraudulent business practices. This is generally a catch-all statute that plaintiffs use to file suit in California when they believe that a business has done something wrong. Further, the plaintiffs also claim that Zoom was negligent in failing to protect the customers' personal information. According to the lawsuit, Zoom owed a duty of care to consumers to take steps to safeguard their privacy, but breached it by selling information.

The plaintiffs claim that, as a result of Zoom's actions, they are left more vulnerable to having their sensitive information compromised. For most of the claims in the lawsuit, the plaintiffs have left the matter of damages open-ended and state that they will prove the damages at trial. For Zoom, this is one thing that could at least temporarily bring down the high-flying company that is provided the means for America to meet right now.

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