The FTC settled with Zoom for deceiving users about its encryption security and unfairly installing software that bypassed browser safeguards. Zoom must implement a comprehensive security program, undergo biennial audits, and is banned from making false security claims. No monetary penalty was imposed.
Zoom must establish and implement a comprehensive information security program with annual risk assessments, vulnerability management, multi-factor authentication, and data deletion controls. It is prohibited from making misrepresentations about privacy and security. The company must undergo biennial third-party security audits and notify the FTC of any data breaches.
In-house legal teams should review vendor, customer, and data processing agreements for clauses related to security representations, encryption standards, and software installation. Specifically, examine any warranties or descriptions of security features (e.g., 'end-to-end encryption'), terms governing the installation of additional software or plugins, and provisions requiring compliance with specific security programs or audits. Given the FTC's findings, agreements may need amendments to ensure all security claims are accurate and non-misleading, incorporate requirements for a comprehensive security program akin to Zoom's mandated program, and include explicit user consent mechanisms for any software that interacts with or bypasses browser safeguards. Additionally, audit rights and reporting obligations should be strengthened to align with the biennial audit requirement.
Entity
Zoom Video Communications, Inc.
Also known as: Zoom
Industry
TechnologyOfficial Press Release
https://www.ftc.gov/news-events/news/press-releases/2020/11/ftc-requires-zoom-enhance-its-security-practices-part-settlement
1923167zoomacco2
https://www.ftc.gov/system/files/documents/cases/1923167zoomacco2.pdf
1923167zoomcomplaint
https://www.ftc.gov/system/files/documents/cases/1923167zoomcomplaint.pdf
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"Zoom Video Communications, Inc."
"FTC Act"
"misled users by touting that it offered “end-to-end, 256-bit encryption”"
"secretly installed software, called a ZoomOpener web server"
The FTC finalized a settlement with Zoom Video Communications, Inc. for misleading consumers about its data security practices and compromising user security. The settlement requires Zoom to implement a comprehensive security program, review software updates for security flaws, and undergo biennial third-party assessments.
The FTC referred a complaint against REPS & Company Inc. and company executives, alleging they bypassed ticket-issuer security controls and purchasing limits to acquire millions of tickets for resale. The complaint was filed by the Department of Justice, and the case will be decided by the court; the press release does not report a penalty or other remedy imposed.
The FTC sued Digital Forensics Corporation LLC and affiliated defendants, alleging they misled sextortion victims with promises of investigative and monitoring services that often were not provided, and used fake positive reviews. A federal court granted the FTC’s request to temporarily halt the defendants’ activities; the complaint remains for the court to decide.
The FTC alleged that Greenway Auto Group advertised vehicle prices thousands of dollars below the amounts consumers actually paid and used mailers falsely suggesting recipients had won cash prizes. Greenway agreed to an order requiring transparent pricing and prohibiting deceptive prize mailers and other misrepresentations; the press release does not state a monetary penalty.
The FTC sent warning letters to 24 large healthcare services companies, cautioning that incomplete, inaccurate, or untimely pricing information for scheduled medical care may be unfair or deceptive. The letters urge recipients to review their price-disclosure practices and take corrective action; they announce no fine or formal order.
$1.9M
The FTC alleged that Premier Franchising Group LLC and Franchise Fastlane LLC made deceptive and unsubstantiated claims about the Premier Martial Arts franchise opportunity and violated the Franchise Rule. The proposed settlements require the companies to pay a combined $1.85 million to compensate franchisees, prohibit certain misrepresentations, and require Franchise Rule compliance; certain franchisees may also cancel their agreements without penalty.