A class action lawsuit has been filed against Zoom Video Communications Inc by one of its shareholder accusing it of overstating its privacy standards and failing to disclose that its service lacked end-to-end encryption.
In a court filing, Michael Drieu, a Zoom Video Communications Inc’s shareholder, stated a string of recent media reports highlight the risks surrounding the company’s privacy flaws in its app, which has resulted in its stock touching new lows.
As on Tuesday, Zoom’s shares were down by about 7.5% at $113.75; they have lost nearly a third of their market value since touching record highs in late-March.
Last week, Zoom’s Chief Executive Officer Eric Yuan apologized to users saying the company had fallen short of the community’s privacy and security expectations and that the company was taking steps to fix the issues.
Zoom is facing a backlash from users, who have grown worried about the lack of an end-to-end encryption in its video sessions and the growing popularity of “zoombombing”, where uninvited guests crash into meetings.
SpaceX is among the many companies which have banned their employees from using Zoom, citing “significant privacy and security concerns,”.
Taiwan’s cabinet has told government agencies to stop using the app.
The case number is 5:20-cv-02353 and it was filed in the U.S. District Court for the Northern District of California.