The widely-used video conferencing service Zoom previously agreed to a settlement of $85M in 2021 after it was discovered that the company misled users regarding the level of encryption it provided. Recently, Zoom has proposed an $18M payment to the Securities & Exchange Commission (SEC) to settle an inquiry related to the same security and privacy concerns.
This proposal was announced in a regulatory filing…
Zoom misrepresented its video encryption
This situation traces back to 2020, when Zoom asserted that video calls on its platform were secured with end-to-end encryption (E2EE), ensuring that only participants could decrypt the video feeds.
End-to-end encryption provides three primary advantages:
- The company cannot access the calls made on its platform.
- Hackers who breach Zoom’s systems cannot view the video content.
- Government entities authorized by Zoom would also be unable to access the calls.
This encryption model is commonly adopted by various messaging services, including Apple’s iMessage and FaceTime.
However, investigations revealed that Zoom’s E2EE claims were inaccurate. While the sessions were encrypted, they did not utilize E2EE, thereby negating the aforementioned protections. This discrepancy came to light in 2020, when the company acknowledged that its statements were false.
Company settled with $85M to users
A class-action lawsuit ensued against Zoom for providing misleading information to its users, culminating in a settlement of $85M in 2021.
Following the lawsuit, the company implemented numerous improvements in security and privacy, although the initial updates did not include E2EE. Eventually, Zoom did offer E2EE as an option, but enabling it disables many features of the platform.
Zoom has now proposed an $18M payment to the SEC
The SEC initiated its investigation into Zoom’s misleading claims at the time they were exposed, focusing on the company’s assertions regarding usage of the service.
In an effort to move forward, Zoom has put forth an offer to pay an $18M fine to settle the matter. As of now, the SEC has not disclosed whether it will accept this offer.
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