Zoom has agreed to pay $86 million (£61.9 million) to resolve a class-action privacy complaint in the United States.
Zoom was accused of invading the privacy of millions of users by exchanging personal information with Facebook, Google, and LinkedIn, according to the lawsuit.
It also accused Zoom of misrepresenting its end-to-end encryption capabilities and failing to prevent "zoombombing" sessions.
Although the company denied any wrongdoing, it has promised to improve its security procedures.
The preliminary settlement is still pending approval by US District Judge Lucy Koh in San Jose, California. It includes a requirement that Zoom will provide its employees with specialized training in data handling and privacy.
"The privacy and security of our users are a major priority for Zoom, and we take seriously the trust our users have in us," a Zoom spokesman stated.
"We're proud of the advancements we've made to our platform, and we're excited to keep innovating with privacy and security in mind."
"Our users' privacy and security are top priorities for Zoom, and we value the faith they place in us," a Zoom spokesman said.
"We're happy of the improvements we've made to our platform, and we're looking forward to continuing to innovate while keeping privacy and security in mind."
The class-action lawsuit filed in March 2020 in the US District Court for the Northern District of California is one of several legal issues that the US-based video-conferencing company is dealing with.
The complaint was filed on behalf of Zoom Meetings paid customers and free users across the United States.
The plaintiffs' lawyers claim that US Zoom users earned $1.3 billion in revenue for the video-conferencing company.
Subscribers in the class action would be entitled to 15% refunds on their subscriptions or $25, whichever is more if the proposed settlement is accepted, while others could earn up to $15.
The plaintiffs' lawyers also intend to seek $21.3m in legal fees from Zoom.
The video-conferencing firm had asked the court to dismiss the motion in March.
However, Judge Koh only granted the dismissal of part of the case about the invasion of privacy and negligence - she allowed the plaintiffs to continue to pursue some claims relating to contracts.
Zoombombing and security concerns
The video-conferencing company has long been chastised for its security practices.
The phenomenon of "Zoombombing" instances, in which unauthorized individuals disrupt meetings to cause problems, is one primary reason why several companies have decided to discontinue utilizing the platform.
Zoom has also been chastised for security problems, such as a hole that allowed an attacker to remove guests from meetings, spoof user communications, and take control of shared screens. Another case included Mac users being coerced into calls without their consent.
Furthermore, the plaintiffs claimed that the platform misrepresented its encryption technique, transport encryption, as end-to-end encryption.
Instead of the meeting's participants being the only ones who can decrypt messages, Zoom can view the video and audio of meetings.
However, the BBC knows that Zoom has been working hard to address security and privacy issues through app updates since April 2020, including end-to-end encryption and more than 100 privacy, safety, and security measures.