Zoom’s Security Scandal Halts Meteoric Rise

As the world faces the threat of global recession, many companies have suffered; but exceedingly few selected ones may prosper. The rapid spread of the COVID-19 has led several investments to fluctuate downward. On the contrary, this gave room for businesses that support the idea of aiding the people at home. As of Monday (4/6), S&P 500 fell by 23% in comparison to 2019, Zoom, Slack and stocks alike have managed to increase their value. Zoom shares, in particular, have surged over 88%, while Slack and DocuSign have risen by 8% and 6.5%, respectively. As most people by now have found themselves working from home, applications that support and better the experience of completing jobs in the comfort of your abode become an essential part of our daily lives. Now, meetings are held online, and tasks are distributed through the internet. Zoom, established in 2011, as an emerging application, has helped generate new opportunities and develop an effective way of communication in terms of working and learning from home.

On Wednesday, there was a privacy security issue on Zoom application that was uttered by one of Zoom’s users where the user’s data revealed illegally. Hence why Taiwan has officially banned the access to use Zoom followed by companies like SpaceX and The New York City Department of Education. To overcome this issue, Senator Richard Blumenthal of Connecticut is currently examining legitimation to vouch that teleconference platforms have adequate protection towards user’s privacy. Previously, cybersecurity researches have warned that security loopholes in the software would allow hackers to eavesdrop on meetings. As a result, Zoom’s shares declined by 8.4% on Thursday (4/2), and their stocks have decreased by 17% in four straight declines. Despite these conditions, the stocks still can be considered increased by 85% throughout this year.

Following the “Zoombombing” incident after the 20 times surge to 200 million daily members since last year, Zoom’s founder and CEO, Eric Yuan, acknowledge that the video conferencing application has security and privacy issues. “We moved too fast, and we had some missteps. We’ve learned our lessons and we’ve taken a step back to focus on privacy and security, ” Yuan said in an interview by The Verge on Monday (4/6). The problems occurred by the fact that the platform was fit toward clients with their own IT security team, rather than a vast consumer platform. The company themselves are currently working to develop a more secure platform, including adding end-to-end encryption that is unfortunately still months away and for now, they are trying to maintain their customers' trust toward the company.

Sources:

Bloomberg

CNBC

CNN Indonesia

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