Business social network LinkedIn has agreed to make temporary changes to its contracting practices to settle a lawsuit by U.S. users who claimed it schemed to prevent potential rivals from entering the market.
The preliminary class action settlement, which does not include a financial payment, was filed on Friday in the federal court in San Francisco and requires a judge’s approval.
LinkedIn was accused in the 2022 lawsuit of illegally fashioning some business contracts to bar third-parties from competing with the company, allowing it to overcharge for premium services and upgraded account features.
The plaintiffs said LinkedIn, now owned by Microsoft , was “effectively paying potential competitors not to enter the market.”
LinkedIn did not immediately respond to a request for comment. Microsoft was not a defendant. LinkedIn denied any wrongdoing.
The plaintiffs' lawyers declined to comment.
Under the terms of the deal, LinkedIn said for three years it will not enforce provisions in current or future contracts for "application programming interfaces" that would restrict a third-party potential rival from competing.
The contracts at issue in the lawsuit allowed LinkedIn business partners to access private user data "in exchange for restraints against competing with LinkedIn," according to the settlement filing.
The plaintiffs said the pause would allow potential rivals to compete more effectively, facilitate reduced prices and increase consumer choice.
There are about 9 million people in the settlement class, which includes LinkedIn members who purchased LinkedIn Premium services between January 13, 2018, and the present, according to the settlement.
Members of the class can opt out of the settlement to sue individually for alleged damages, the settlement said.
The plaintiffs said they planned to present expert testimony at the time of final approval to show the overall value of the settlement, since there is no money being paid to LinkedIn users.
The plaintiffs’ lawyers said they would seek up to $4 million in legal fees.
