Plaintiffs Also Allege LinkedIn Colludes with Facebook
Plaintiffs from Georgia, Texas, and Arizona have filed suit against LinkedIn, accusing the company of actions that breach antitrust laws, including possible collusion with the company formerly known as Facebook. The three plaintiffs, Todd Crowder, Kevin Schulte, and Garrick Vance, are premium LinkedIn subscribers who filed suit in the Northern District of California, asking that the claim be maintained as a class action. The plaintiffs also seek injunctive relief, attorneys’ fees, costs, and trebled damages.
The plaintiffs seek to represent the class of LinkedIn premium subscribers who paid the company for services beginning in January 2018 through the present. The suit alleges that LinkedIn has breached antitrust laws in several ways to monopolize the professional social media networking market.
The plaintiffs allege that LinkedIn is guilty of charging its customers premium subscription fees and then selling their data without permission to LinkedIn partners, thereby stifling market entry by competitors and inflating prices.
The suit also alleges that as early as 2015, “LinkedIn’s subscription business was protected by a powerful barrier to entry, which was the net sum of LinkedIn’s data centralization and aggregation, its machine learning and AI infrastructure, and the inferred data that it produced.” The suit calls this powerful combination LinkedIn’s “Data, Machine Learning, and Inference Barrier to Entry” (DMIBE).
According to the suit, the company “deployed sophisticated technological countermeasures specifically designed by LinkedIn to prevent users’ public data from being accessed by potential or actual competitors, thereby maintaining and fortifying the DMIBE and hindering potential entry at scale.”
LinkedIn has actively engaged in “affirmative anticompetitive conduct.”
This powerful DMIBE made LinkedIn a desirable acquisition for Microsoft, which purchased LinkedIn in 2016 for the sum of $26.5 billion, the plaintiffs say. The suit alleges that this acquisition by Microsoft only strengthened LinkedIn’s position and that since the acquisition by Microsoft, LinkedIn has actively engaged in “affirmative anticompetitive conduct.”
LinkedIn is also accused of entering into an agreement with Facebook – which the suit calls the company’s “most obvious natural competitor” – to the benefit of both companies. The lawsuit alleges that through this collusion with Facebook, LinkedIn has “maintained its monopoly in professional social networking without the threat of entry by Facebook, and Facebook has fortified its dominance and control over personal social networking, perhaps through data assistance from LinkedIn.”
The plaintiffs support their claims of collusion between LinkedIn and Facebook by noting that Facebook has done this sort of thing before. The suit alleges that “Facebook has been publicly documented to have made just this kind of data-for-market-division agreement with rival Google in or around 2018, in an agreement named “Jedi Blue.” The suit reasons that Facebook’s history of such tactics “makes it highly likely that there was, in fact, an express or implicit agreement between LinkedIn and Facebook in or around 2015 by which Facebook agreed not to enter the Professional Social Networking market.”
The plaintiffs also point out that Facebook has entered into a great number of markets beginning in 2016; however, it appears that the only market Facebook didn’t attempt to enter was the LinkedIn market.
Facebook is facing claims by the Federal Trade Commission that it has monopolized the social network market. A federal court in Washington, D.C. upheld an amended complaint by the FTC against Facebook earlier this month.
Edited by Tom Hagy and Kristy Griffin, J.D. for MoginRubin LLP.