Zoom settles data privacy lawsuit for $85m

Zoom Video Communications Inc (ZM.O) agreed to pay $85 million and bolster its security practices to settle a lawsuit claiming it violated users' privacy rights by sharing personal data with Facebook_ Google and LinkedIn_ and letting hackers disrupt Zoom meetings in a practice called Zoombombing.

A preliminary settlement filed on Saturday afternoon requires approval by U.S. District Judge Lucy Koh in San Jose_ California.

Subscribers in the proposed class action would be eligible for 15% refunds on their core subscriptions or $25_ whichever is larger_ while others could receive up to $15.

Zoom agreed to security measures including alerting users when meeting hosts or other participants use third-party apps in meetings_ and to provide specialized training to employees on privacy and data handling.

The San Jose-based company denied wrongdoing in agreeing to settle.

In a statement on Sunday_ Zoom said: "The privacy and security of our users are top priorities for Zoom_ and we take seriously the trust our users place in us."

Saturday's settlement came after Koh on March 11 let the plaintiffs pursue some contract-based claims.

Though Zoom collected about $1.3 billion in Zoom Meetings subscriptions from class members_ the plaintiffs' lawyers called the $85 million settlement reasonable given the litigation risks. They intend to seek up to $21.25 million for legal fees.

Zoombombing is where outsiders hijack Zoom meetings and display pornography_ use racist language or post other disturbing content.

Koh said Zoom was "mostly" immune for Zoombombing under Section 230 of the federal Communications Decency Act_ which shields online platforms from liability over user content.