The Rise of Zoom, Interrupted by Spying Allegations

In 2020, the widespread need to work from home has resulted in a stratospheric rise for videoconferencing platform Zoom. In the quarter that ended on October 31, Zoom’s total revenue amounted to $777 million, up 367 percent from the same period of 2019. The company also raised its outlook for the fourth quarter of 2020 and the full fiscal year, which it expects to end with revenue of $2.58 billion and non-GAAP operating income of approximately $865 to $870 million.

That’s the good news. Growth often comes with growing pains, and Zoom is currently embroiled in an international headache that involves espionage, counterintelligence, and hacking. All in all, it’s a story worthy of a spy film. U.S. counterintelligence agencies have observed the espionage services of Russia, Iran, and North Korea attempting to spy on Americans’ video chats, according to Time magazine’s John Walcott. But it’s China that has made the most concerted push to take advantage of Zoom’s shortcomings.

“More than anyone else, the Chinese are interested in what American companies are doing,” said one of Time’s sources.

Spies – Chinese and others – are taking advantage of Zoom’s shortcomings in security. The Citizen Lab, a research organization at the University of Toronto, found that Zoom’s encryption scheme “has significant weaknesses,” including routing some encryption keys through Chinese servers, and that its ownership structure and reliance on Chinese labor could “make Zoom responsive to pressure from Chinese authorities.”

Earlier this year, many organizations discontinued the use of Zoom because of perceived security shortcomings. In April, the Senate’s Sergeant-at-Arms told Senators not to use Zoom because meetings could be compromised. Many meetings and even virtual learning by students have been interrupted by “Zoombombing” trolls who enter and disrupt Zoom sessions.

Last week, the spy drama escalated when Zoom fired executive Xinjiang Jin after the U.S. Justice Department charged him with conspiracy to commit interstate harassment and unlawful conspiracy to transfer a means of identification. Jin allegedly participated in a scheme to disrupt a series of meetings in May and June 2020 held to commemorate the June 4, 1989 Tiananmen Square massacre in China.

The company also put other employees on administrative leave pending the results of an internal investigation.