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New York City Bans Zoom Video in Schools Due to Rising Security Concerns

By Aditya Raghunath – Apr 6, 2020 at 12:56PM

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Will recent privacy and security issues reduce Zoom Video's daily active users?

New York City has ordered schools to stop using Zoom Video's (ZM 1.04%) collaboration platform due to rising security and privacy issues, according to a Tech Crunch report over the weekend.

New York City's spokesperson for the Department of Education, Danielle Filson stated, "Providing a safe and secure remote learning experience for our students is essential, and upon further review of security concerns, schools should move away from using Zoom as soon as possible. There are many new components to remote learning, and we are making real-time decisions in the best interest of our staff and students."

A hacker trying to gain access

Image Source: Getty Images.

Zoom Video has experienced a significant surge in daily active users since schools and colleges have shut down in-school learning and more people (and students) are working from home as a result of efforts to stem the coronavirus outbreak from spreading further. At the end of the December quarter, Zoom's daily active users were approximately 10 million. This figure rose to a staggering 200 million in March.

Last month, New York's Attorney General, Letitia James expressed concerns over Zoom's ability to handle this exponential growth in users as there were several reports of third parties gaining unauthorized access to consumer webcams. Hackers were interrupting video sessions which makes several students vulnerable in an unsafe digital environment. Zoom was also accused of selling data to Facebook, further highlighting privacy issues.

Last week, SpaceX's CEO Elon Musk issued a memo forbidding employees to use Zoom to conduct meetings. This was after the FBI warned that malicious third-parties are disrupting virtual meetings and displaying pornographic images to attendees.

Zoom stated that over 90,000 schools in 20 countries have taken up its offer to use the company's collaboration tools and conduct classes remotely. In an open letter to Zoom users last week, company CEO Eric Yuan promised to address these privacy concerns as a top priority and to do so with total transparency.

These issues have contributed to Zoom's recent stock decline. The stock is currently trading about 26% below record highs. 

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Facebook and Zoom Video Communications and recommends the following options: short May 2020 $120 calls on Zoom Video Communications. The Motley Fool has a disclosure policy.

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