On Thursday, three LinkedIn users who pay for its premium subscription service filed a lawsuit against the company alleging it charges supercompetitive prices from users and sells their data under them. The putative Northern District of California class action claims that LinkedIn Corporation, acquired by Microsoft Corporation in 2016, maintains its monopoly through various anti-competitive means that bolster its own position while keeping competitors at bay.
The plaintiffs, three users from Georgia, Texas and Arizona, detail these tactics in the 118-page complaint, beginning with LinkedIn’s “rapid race to capture network and lockdown effects by scaling at all costs,” which now translates to a user base of over 750 million worldwide. The filing alleges that in 2015, the professional social network was well on its way to developing competitive isolation through what the complaint calls “Data, Machine Learning, and Inference Barrier to Entry (DMIBE)”.
In particular, the complaint alleges four primary ways that LinkedIn violates federal antitrust laws. First, it says the company is non-optionally selling premium subscription user data to partners, which reduces consumer choice, inflates prices, and stifles competition and market entry. Then the company would have “deployed[s] sophisticated technological countermeasures specifically designed by LinkedIn to prevent access to public user data by potential or actual competitors, thereby maintaining and strengthening the DMIBE and hindering potential large-scale entry.
The complaint also accuses LinkedIn of integrating its users’ data with powerful AI, machine learning data and expensive infrastructure, especially after the acquisition when it relied on Microsoft’s Azure cloud servers. and graphics processing unit (GPU) arrays – elite infrastructure owned by only a handful of the world’s largest companies. In order to challenge LinkedIn, a new entrant “would therefore not only need to obtain the data (quantity and type) needed to train machine learning models, but would need large (and continuous) access to arrays expensive GPUs or TPUs to form these models,” the filing states.
Finally, the lawsuit accuses LinkedIn of having entered into an illicit agreement with Facebook, “its most obvious natural competitor”, in the 2010s to share the market and more recently to consider access to data. Consequently, LinkedIn has “maintained its monopoly over professional social networks without the threat of Facebook entry, and Facebook has strengthened its dominance and control over personal social networks, perhaps with the assistance of data from LinkedIn,” claim the plaintiffs.
Notably, the allegations come just a day after a federal court ruled that the Federal Trade Commission’s case against Facebook, an attempt to break up the company, survived the firing.
In the case against LinkedIn, the plaintiffs seek an injunction that would allow premium subscribers to opt out of LinkedIn’s sale of their data, as well as an equitable remedy that would “stop and relax the unprecedented and anti-competitive integration of LinkedIn’s business data, machine learning and artificial intelligence infrastructure with Microsoft’s powerful cloud computing hardware. The litigants also seek treble damages. They are represented by Bathee Dunne LLP.