Judge Says LinkedIn Must Face Class Action Alleging Premium Subscription Monopoly

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Linkedin Must Face A Class Action Lawsuit Alleging It Monopolizes The Professional Networking Market To Inflate Premium Subscription Fees.

LinkedIn, the well-known professional networking platform, is now at the center of an antitrust class action lawsuit over its Premium subscription services. 

On March 21st, a federal judge gave the green light for a group of LinkedIn users to pursue their claims against the company, alleging that LinkedIn dominates the professional networking scene and uses this power to hike up prices for its Premium subscription services.

Those bringing the complaint are subscribers to LinkedIn Premium, which offers added features for networking in the business world. Subscriptions for this service range from $29.99 to $99.95 per month, as reported by Courthouse News Service.

Price competition and monopoly allegations

The lawsuit accuses LinkedIn of leveraging its position in the professional networking market to control what it can charge for its Premium services. According to the plaintiffs, LinkedIn does so by entering into non-compete agreements with other companies, creating a scenario where, as per U.S. District Judge Haywood Gilliam Jr., LinkedIn faces "no competitive check" on the prices it sets for Premium users.

The suit argues that absent the non-compete agreements, there would likely be more vigorous price competition in the market that LinkedIn allegedly monopolizes. The plaintiffs have outlined that LinkedIn charges premium subscription prices and that no similar social networks offer comparable subscription products that allow users to access detailed information about others on the network.

Central to the legal challenge is LinkedIn's management of its application programming interfaces (APIs), which the plaintiffs claim are used to maintain its market stronghold. A 2019 Medium blog post titled "The frustrations of dealing with the LinkedIn API" has been cited in the complaint. The post states:

"LinkedIn has a number of APIs, there’s the Profile-API for getting users profiles and there’s the Profile-Edit-API which can be used to send a patch of the user’s profile to update the content. In order to use the Profile-Edit-API you need to have the w_compliance permission associated with your app. The w_compliance permission is gained via LinkedIn’s partner program where an app that promises not to compete with LinkedIn or abuse the API can gain access to more data.”

This suggests a strategy where LinkedIn allegedly exchanges data access for promises from partners not to compete.

Judge says LinkedIn can’t dodge plaintiffs’ claims

Judge Gilliam has found the allegations presented by the plaintiffs to be sufficient to move forward in the legal process, Bloomberg Law reported. He noted that the plaintiffs "identify some of defendant’s API partners and allege that these companies, but for signing API agreements, would be well positioned to compete with defendant.” 

The judge further stated that such facts "adequately allege that defendant entered into non-compete agreements which work to 'impair the opportunities of rivals and do not further competition.'"

Disregarding LinkedIn’s claim that the blog post is an unverified source, Judge Gilliam ruled that the plaintiffs have presented a plausible legal theory, saying, "Whether this theory bears out factually is for a later stage, but plaintiffs have adequately alleged it."

The outcome of this case has the potential to impact how LinkedIn and similar platforms conduct their business operations and may introduce changes to pricing structures for professional networking services in the digital age.

The plaintiffs are represented by Yavar Bathaee, Edward M. Grauman, Andrew Wolinsky, and Brian J. Dunne of Bathaee Dunne LLP.

The LinkedIn premium subscriptions antitrust class action lawsuit is Crowder et al. v. LinkedIn Corporation, Case No. 5:22-cv-00237, in the U.S. District Court for the Northern District of California, San Jose Division.