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Blog | Dec 01, 2020

FTC Settles with Zoom

Like Bad News, Regulatory Changes Come In Threes

There’s an ingrained superstition in western culture that bad things come in threes. While “bad” is subjective and depends on your perspective, three key findings have set a 2020 cadence of changing the cybersecurity accountability landscape. The latest of which is the Federal Trade Commission (FTC) settlement with Zoom over misleading claims about the security of their popular video conferencing service.

In case you missed the first two quakes, the first hit in May, when the judge in the Capital One class action suit ruled in favor of the plaintiffs to release the Mandiant incident response report. The decision, upheld on appeal in June, resets general assumptions about protected work documents and the automatic assumption of attorney-client privilege when legal counsel is used to engage cybersecurity consultants.

The second quake came in November when the U.S. Treasury threatened potential sanctions against firms that pay or facilitate payments of ransoms to criminal groups, if they are identified in the Office of Foreign Assets Control (OFAC) designated malicious cyber actors under its cyber-related sanctions program or other sanctions programs.

Back to Zoom. The third event started in May when the FTC announced an investigation into complaints against Zoom Video Communications, Inc. In the complaint, the director of the FTC’s Bureau of Consumer Protection noted, “Zoom’s security practices didn’t line up with its promises.” The FTC alleged that Zoom misrepresented their use of end-to-end encryption and cloud-storage security, which gave users a false sense of security, especially for businesses that manage sensitive or protected information such as medical records and financial data.

As the FTC notes, Zoom usage went from 10 million people daily at the end of 2019 to over 300 million daily users by April 2020. The increase was attributed to the Covid-19 pandemic and tectonic move to homeschooling and remote work.

In November, the FTC announced a settlement with Zoom that will require the company to “implement a robust information security program.” The Zoom website, numerous blog posts, and a white paper on security were offered as evidence of “deceptive and unfair practices that undermined the security of its users.”

As part of the settlement (of course agreed to without admitting or denying the allegations), Zoom must:

  • Conduct annual risk assessment of internal and external factors with documented safeguards to mitigate identified risks
  • Implement a full vulnerability management program
  • Deploy various controls including multi-factor authentication, data deletion controls and measures to prevent the use of known compromised user credentials
  • Review software updates to identify security flaws, including third-party security features
  • Conduct employee security awareness training
  • Have biennial assessments of its security program done by an independent third party (requiring FTC approval)
  • Notify the FTC if it experiences a data breach

What does this mean? Basically, don’t make motherhood and apple pie statements about security. It means security by design, and it means firms are accountable for promises they make about security.

Like regulated industries, it means businesses must back their claims. Healthcare firms know what it’s like to fall afoul of the FDA. In my early days in marketing and technical communication, I learned that words matter. In my case, I used “diagnose” instead of “detect,” which was a no-no under FDA controls. Only licenced medical doctors can “diagnose,” while machines can simply “detect.” I was summoned to the legal headmaster’s office for my troubles. But, I learned the lesson. Hopefully other businesses that have “borrowed” boilerplate security statements for their website will heed this lesson too.



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