I can't reproduce. The URI you've given is correctly decompressed by Net::HTTP using ruby 2.0.0:
$ cat test.rb
require 'net/http'
require 'pp'
uri = URI("http://vimeo.com/api/oembed.json?url=http://vimeo.com/69655841&width=150")
http = Net::HTTP.new(uri.host, uri.port)
http.set_debug_output $stderr
res = http.get(uri.request_uri)
pp res.to_hash
p res.body[0, 30]
$ ruby20 -v test.rb
ruby 2.0.0p353 (2013-11-22 revision 43784) [x86_64-darwin13.0.0]
opening connection to vimeo.com:80...
opened
<- "GET /api/oembed.json?url=http://vimeo.com/69655841&width=150 HTTP/1.1\r\nAccept-Encoding: gzip;q=1.0,deflate;q=0.6,identity;q=0.3\r\nAccept: */*\r\nUser-Agent: Ruby\r\nConnection: close\r\nHost: vimeo.com\r\n\r\n"
-> "HTTP/1.1 200 OK\r\n"
-> "Server: Apache\r\n"
-> "Access-Control-Allow-Origin: *\r\n"
-> "Access-Control-Allow-Headers: X-Requested-With\r\n"
-> "Expires: Thu, 30 Jan 2014 20:52:07 GMT\r\n"
-> "Last-Modified: Thu, 30 Jan 2014 20:12:02 GMT\r\n"
-> "Etag: \"215c14df5b7b774ff7b23cfb02b34da62c9ec022\"\r\n"
-> "X-UA-Compatible: IE=edge\r\n"
-> "X-DNS-Prefetch-Control: on\r\n"
-> "Vary: Accept-Encoding\r\n"
-> "Content-Encoding: gzip\r\n"
-> "Content-Type: application/json\r\n"
-> "Content-Length: 745\r\n"
-> "Accept-Ranges: bytes\r\n"
-> "Date: Thu, 30 Jan 2014 20:51:07 GMT\r\n"
-> "X-Varnish: 2058928850\r\n"
-> "Age: 0\r\n"
-> "Via: 1.1 varnish\r\n"
-> "X-Varnish-Cache: 0\r\n"
-> "Connection: close\r\n"
-> "X-VServer: 10.90.128.147\r\n"
-> "\r\n"
reading 745 bytes...
-> "\x1F\x8B\b\x00\x00\x00\x00\x00\x00\x03[snipped gzip response]"
read 745 bytes
Conn close
{"server"=>["Apache"],
"access-control-allow-origin"=>["*"],
"access-control-allow-headers"=>["X-Requested-With"],
"expires"=>["Thu, 30 Jan 2014 20:52:07 GMT"],
"last-modified"=>["Thu, 30 Jan 2014 20:12:02 GMT"],
"etag"=>["\"215c14df5b7b774ff7b23cfb02b34da62c9ec022\""],
"x-ua-compatible"=>["IE=edge"],
"x-dns-prefetch-control"=>["on"],
"vary"=>["Accept-Encoding"],
"content-type"=>["application/json"],
"content-length"=>["745"],
"accept-ranges"=>["bytes"],
"date"=>["Thu, 30 Jan 2014 20:51:07 GMT"],
"x-varnish"=>["2058928850"],
"age"=>["0"],
"via"=>["1.1 varnish"],
"x-varnish-cache"=>["0"],
"connection"=>["close"],
"x-vserver"=>["10.90.128.147"]}
"{\"type\":\"video\",\"version\":\"1.0"