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Focus on video communications (ZM) – Get the report Shares extended their declines on Monday after the Federal Trade Commission said it would require the online meeting group to improve its security and privacy features.
In a settlement the FTC reached with the San Jose-California tech group related to complaints about the privacy of users whose information was collected during taped conferences, the FTC said it would demand that Zoom “put in implements a robust information security program “as well as a” ban on privacy and security misrepresentation. “
Zoom had told regulators it offered “26-bit end-to-end encryption” to secure user communications, “when in fact it offered a lower level of security,” the FTC said, giving users a false sense of security.
“During the pandemic, virtually everyone – families, schools, social groups, businesses – uses video conferencing to communicate, making the security of these platforms more critical than ever,” said the director of consumer protection. of the FTC, Andrew Smith. “Zoom’s security practices did not live up to its promises, and this action will help ensure that Zoom meetings and data are protected on Zoom users.”
Zoom shares were marked sharply lower at the start of Monday’s trading day after the FTC settlement was announced, extending a decline triggered by Pfizer Inc. (PFE) – Get the report update of his coronavirus vaccine trial, which he said had achieved a 90% efficacy rate and could be ready for emergency use clearance from the Food & Drug Administration later this year .
Zoom’s shares traded 13.6% lower on the Nasdaq, compared to a 0.45% gain for the tech-focused benchmark, to change hands at $ 4,131.79 each at the start of the year. ‘afternoon.
The move still leaves Zoom in shares some 500% higher than at the start of the year, with gains due to increased use of its conferencing and meeting tools during the peak and subsequent waves of the pandemic. world of coronavirus.
Zoom’s revenue for the three months ending September jumped 355% to $ 663.5 million, the company said earlier this month, while raising its guidance for fiscal 2021 to a range between 2.37 and 2.39 billion dollars.
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