US judge rejects LinkedIn antitrust settlement, citing ‘serious problems’

By Mike Scarcella

WASHINGTON, Dec 18 (Reuters) - A federal judge in California has refused to grant preliminary approval to a proposed class action settlement between LinkedIn and subscribers who accused the company of monopolizing the professional social networking market.

In an order on Wednesday, U.S. District Judge Haywood Gilliam Jr in Oakland said the deal, which would require LinkedIn to temporarily alter its contracting practices but does not include a monetary payout for users, had “serious problems” and was not “fair, reasonable, and adequate.”

LinkedIn was accused in the 2022 lawsuit of using terms in some business contracts to bar third parties from competing with the company, allowing it to overcharge users for premium services and upgraded account features.

Under the terms of the proposed deal, disclosed in a filing in July, LinkedIn agreed for three years not to enforce provisions in current or future contracts for "application programming interfaces" that would restrict potential third-party rivals from competing.

“Plaintiffs seek approval of a settlement providing only injunctive relief with unclear value for a limited period of three years,” Gilliam said. He said the plaintiffs “do not attempt to quantify the monetary relief they could have achieved at trial.”

LinkedIn and attorneys for the plaintiffs did not immediately respond to requests for comment.

The settlement class includes about 9 million LinkedIn members who purchased premium services between Jan. 13, 2018, and the present, according to the agreement.

In seeking approval of the deal, the plaintiffs’ lawyers told the court that the terms would encourage competition, facilitate reduced prices and increase consumer choice.

But Gilliam said neither side presented “evidence or explanation” that three years would be enough for an existing or future rival to be able to compete with LinkedIn.

He also questioned the plaintiffs’ plan to seek up to $4 million in legal fees, calling the amount disproportionate.

The case is Todd Crowder et al v. LinkedIn Corp, U.S. District Court, Northern District of California, No. 4:22-cv-00237-HSG.

For plaintiffs: Yavar Bathaee and Brian Dunne of Bathaee Dunne; Christopher Burke of Burke LLP; and Carol O’Keefe of Korein Tillery

For defendant: Russell Cohen and Julia Chapman of Dechert

(Reporting by Mike Scarcella)

((Email: mike.scarcella@thomsonreuters.com; Phone: 202-985-8228.))