Crowder v. LinkedIn Corporation

Background

The plaintiffs filed a proposed antitrust class action against LinkedIn Corporation. They subscribe to LinkedIn Premium Career, which gives paying users additional features. The amended complaint alleges that LinkedIn has monopoly power in the professional social networking market and can overcharge Premium subscribers because its centralized data, machine-learning models, and inferred data create a barrier to entry.

The plaintiffs asserted claims under Section 2 of the Sherman Act for monopolization and attempted monopolization. Their principal theory concerned LinkedIn’s private application programming interfaces, or APIs—interfaces that allow developers to request and receive information from LinkedIn. The plaintiffs alleged that, beginning in 2015, LinkedIn stopped offering general API access and required developers to become selected API partners. They further alleged that LinkedIn gave selected partners access to private user data only if they agreed not to compete with LinkedIn, including by creating a rival product. The plaintiffs alleged that this conduct prevented potential competitors from entering the market and reduced price competition for Premium products. The amended complaint also alleged that LinkedIn integrated its user data with Microsoft’s Azure cloud system, but the court did not need to address that alternative theory at this stage.

Motion to Dismiss

The court applied Federal Rule of Civil Procedure 12(b)(6), which asks whether a complaint states a legally valid claim supported by enough factual allegations to make liability plausible. For monopolization under Section 2, the plaintiffs had to allege monopoly power, the willful acquisition or maintenance of that power, and antitrust injury. The court found the allegations about agreements requiring potential competitors not to compete adequately pleaded anticompetitive conduct. It also found that the allegations of higher barriers to entry, excluded competitors, lack of comparable products, and reduced price competition adequately pleaded harm to competition. The court therefore denied LinkedIn’s motion to dismiss the monopolization claim.

For attempted monopolization, the plaintiffs had to allege specific intent to monopolize, anticompetitive conduct, and a dangerous probability of success. The court concluded that the alleged exclusion of competitors and resulting lack of competitive price pressure sufficiently supported an inference of specific intent at the pleading stage. It therefore denied LinkedIn’s motion to dismiss the attempted-monopolization claim as well.

The court noted that the parties had submitted certain private API agreements produced in discovery. Although the court could acknowledge the agreements’ existence and contents, it could not use disputed interpretations of those agreements to contradict well-pleaded allegations in the complaint. The court also observed that the agreements submitted so far appeared not to contain the outright noncompete terms alleged in the complaint, and said it would consider whether an early summary-judgment motion on that issue might be warranted. That observation did not change the ruling on the motion to dismiss.

Judicial Notice

The court granted LinkedIn’s request for judicial notice of two web pages cited in the amended complaint: an API-related blog post and a publicly accessible website discussing API agreements. Judicial notice allows a court to recognize facts that are not reasonably disputable and can be readily verified from reliable sources. The court separately discussed incorporation by reference, a doctrine allowing certain documents extensively relied on in a complaint to be considered at the motion-to-dismiss stage. The court concluded that the API agreements did not change its analysis because their meaning and effect remained disputed.

Motions to Seal

The court applied the “compelling reasons” standard because the sealing requests concerned documents more than tangentially related to the case’s merits. The court granted the requests as to the materials specified by non-party Hootsuite, Inc., because the proposed redactions concerned sensitive confidential business information about Hootsuite’s technology and product structure. The court denied the requests as to the other third-party agreements because no party or non-party provided a basis for sealing them.

Disposition

The court denied Defendant’s motion to dismiss. It granted in part and denied in part the parties’ requests concerning sealing another party’s material. Sealing was granted for the materials specified by Hootsuite and denied otherwise. The court lifted the discovery stay, directed the parties to file public versions of documents for which sealing was denied within ten days, and set a telephonic case-management conference for April 9, 2024.