United States-based video conferencing company Zoom has decided to suspend the free use of its app by individual users in China. The restriction disallows Chinese users from hosting meetings on the platform and from signing up for free accounts.
The restrictions were imposed after China announced the holding of an annual meeting of its Congress. The meeting was said to be a significant political event in the country. The details of the meeting would include internet controls and restrictions within China. However, the new rules do not prohibit free corporate or individual users from joining meetings on Zoom.
The restrictions started on May 1, 2020. According to one of Zoom's Chinese partners that run the company's official website in China Shanghai Donghan, Chinese users are restricted from purchasing the company's services as well.
The imposition was caused by the regulatory requirements imposed in the US. Shanghai Donghan further revealed that businesses need to inform their sales representatives to purchase licenses before the same would be sold to them.
A representative of Shanghai Donghan's office claimed that the business license to operate with Zoom should be issued by Chinese market regulators. This would allow them to purchase services from Shanghai Donghan. Furthermore, the fees may only be reflected from a corporate bank account to be considered valid.
Another Chinees partner of Zoom Shanghai Huawan Telecommunications that runs the website Zoomvideo.cn only allows corporate users to register and buy the services. It does not inspect users' corporate information before they can purchase the said services.
It is unclear if the Zoom headquarters made the restrictions. After the restrictions were imposed, Chinese users of Zoom resorted to services provided by Shanghai Donghan and Shanghai Huawan. During such time, Zoom was blocked in China.
Furthermore, Zoom faces scrutiny in overseas markets for its dependency on Chinese services for its product development. Zoom was founded by Chinese immigrant Eric Yuan who runs a part of his product development team in China since 2011.
Last April, Zoom admitted that some of its users mistakenly routed their calls through data centres in China. Foreign government agencies and companies then feared that their meetings held in Zoom might be vulnerable to Chinese surveillance.
At present, the video conferencing market is forecasted to hit 6.37 billion USD by the end of 2026. The stocks for companies operating in this market, including Zoom, are expected to further increase in the coming years. The features of the app were labelled as those that reduce travel time for business personnel in fueling the market. Zoom, in particular, witnessed significant increases in its uptake among other players in the market.
