Big companies reportedly are turning their backs on Zoom Video Communications' (ZM) - Get Report popular but easily hacked conferencing app, despite the company proactively working to address major security flaws and the unnerving issue of “Zoombombing.”
Large companies including the likes of Daimler AG, Ericsson (ERIC) - Get Report, NXP Semiconductors (NXPI) - Get Report and Bank of America (BAC) - Get Report are among a wave of companies forbidding or warning employees against using the online web conferencing app because of concerns about its security.
It was later clarified that companies were not necessarily banning the use of the platform outright, but rather in some cases instilling more stringent precautions about how and when to use it, and what security settings to incorporate.
Even so, the additional scrutiny comes as corporations like Tesla (TSLA) - Get Report and government agencies including the New York City Department of Education ban the app’s use, or at least halt it before clarifying which security measures they should collectively institute, as was the case in Singapore.
India has deemed Zoom an unsafe platform and initiated a public contest to develop a secure homegrown video-chat alternative, according to Bloomberg.
The action comes as Zoom has grown into a proverbial lifeline for millions who have logged on to communicate face to face through the coronavirus pandemic and global lockdowns. The company said it passed the milestone of 300 million daily meeting participants this week, and its share price remains close to record highs.
However, the surge in users to its platform has exposed significant security flaws – not only in how people can virtually step in to others’ online meetings, a phenomenon that has earned the moniker “Zoombombing,” but also gain access to recordings of meetings and even individual computer and network systems.
At the end of March, Zoom received a letter from the office of New York Attorney General Letitia James asking what new security measures the company has put in place, if any, to handle its recent surge in usage.
For its part, Zoom has sought to address the concerns, bringing on a slate of technology experts who have beefed up encryption and also changed around the platform's interface to allow users to add on more features that can screen, mute and kick off participants.
The San Jose company's CEO Eric Yuan said on Wednesday that it was rolling out a variety of updated security measures, including the ability to report bad activity and security breaches to Zoom, and higher encryption levels.
The company also points to numerous large, high-profile companies that continue to utilize Zoom’s platform, including Goldman Sachs (GS) - Get Report, J.P. Morgan and the Financial Industry Regulatory Authority (FINRA).
Meanwhile, other providers that offer online communications platforms such as Microsoft (MSFT) - Get Report, Google (GOOGL) - Get Report, Facebook's (FB) - Get Report WhatsApp and Ring Central (RNG) - Get Report and working to boost and popularize their own offerings - or cannibalize on Zoom's misfortunes - or, in the case of Facebook, roll out new ones.
Shares of Zoom ended the trading day Thursday up 12.54% at $169.09.