Zoom Banned From New York City Schools on Privacy Concerns

Video-conferencing service Zoom Video is being banned by the New York City Department of Education over security and privacy concerns.
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Video conferencing service Zoom Video  (ZM) - Get Report, which has gained enormous popularity amid the coronavirus pandemic and lockdown as both businesses and educators have moved to virtual meetings, is being banned by the New York City Department of Education over privacy concerns.

Department of Education Chancellor Richard Carranza announced over the weekend that security and privacy issues were behind the department's decision to ban the platform "as soon as possible," according to a memo first reported by Chalkbeat.

Schools are instead being directed to use Microsoft  (MSFT) - Get Report Teams, which the department has already started training teachers and staff to use, according to Chalkbeat. The platform is compliant with student privacy laws, including FERPA, the Family Educational Rights and Privacy Act

The moves follows a mass-shift among students and teachers to the video-conferencing platform, which in turn had catapulted Zoom’s shares to new heights as the number of users on its platform surged.

However, the increase in popularity and usage brought to light significant privacy and security flaws in the company’s offering, prompting warnings from the FBI and demands for increased user privacy from the New York attorney general.

Despite the availability of numerous other video-conferencing and online chatting services from the likes of Alphabet-owned Google  (GOOGL) - Get Report, which offers Google Meet, and Microsoft, which also offers Skype, Zoom has quickly become a verb amid the coronavirus pandemic and subsequent lockdown as users flock to its platform - not only for work and school but also for socializing and events.

On March 23, Zoom was downloaded 2.13 million times from the Apple Apple App Store, up from 2.04 million the day before. Two months ago, the app averaged 56,000 global downloads a day.

However, with its widespread success has come issues of privacy, in particular a phenomenon known as "Zoombombing," in which individuals infiltrate online meetings and classes and share indecent images or worse.

Meanwhile, Zoom founder and CEO Eric Yuan has dumped some $38 million of the company's stock ahead of the security-breach investigations, according to recent regulatory filings.

Shares of Zoom Video were down 7.17% at $119.01 in trading on Monday.