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Federal judge orders RingCentral to stop selling Zoom

Zoom said it will continue supporting companies that bought RingCentral's Zoom-equipped Meetings app before Feb. 1. The companies are embroiled in a contract dispute.

A federal judge ordered RingCentral to stop selling Zoom's video conferencing service within its Meetings collaboration app.

This week, U.S. District Judge Edward J. Davila reversed his temporary order that allowed RingCentral to continue offering Zoom. The latter sued RingCentral in March for breach of contract after the company launched a homegrown version of Meetings that didn't use Zoom.

"We are pleased with this initial ruling in favor of Zoom, and look forward to resolving this issue through the continuing legal process," Zoom said in a statement.

Dhaivat Shah, a partner at Silicon Valley law firm Grellas Shah LLP, said the judge's reversal is both surprising and a "serious setback" for RingCentral.

"It appears that Zoom convinced [Judge Davila] that RingCentral's proposed interpretation of the contract is not as persuasive as it first appeared," Shah said.

RingCentral said most customers would not be affected by the court's decision because they are already using the Meetings alternative, RingCentral Video. Nevertheless, the company will continue fighting the lawsuit.

"We have faith in the judicial process and are confident that we will prevail," RingCentral said in a statement.

Zoom said it will continue to support RingCentral Meetings customers who bought the product before Feb. 1, when the companies' partnership agreement expired. Zoom filed its lawsuit last month, nearly a year after RingCentral launched Video.

Zoom accused RingCentral of using the Meetings app to lure customers and then switch them over to its product. Zoom said the "bait and switch" tactic was unfair to customers.

RingCentral argued that its customers should have a choice of collaboration app. The company said the rapid adoption of Video proved that customers preferred it to Zoom.

The legal battle follows a period of increased competition between the two companies. Zoom launched a product called Zoom Phone in 2019 that competes with RingCentral's telephony service. RingCentral launched a standalone video and messaging app called Glip Pro+ late last year.

Maxim Tamarov is a news writer covering mobile and end-user computing. He previously wrote for The Daily News in Jacksonville, N.C., and the Sun Transcript in Winthrop, Mass. He graduated from Northeastern University with a degree in journalism. He can be found on Twitter at @MaximTamarov.

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