Microsoft's LinkedIn Hit With Lawsuit For Violating User Privacy, Allegedly Sharing Private Data For AI Model Training

LinkedIn, owned by Microsoft Corporation MSFT, has been accused by Premium users of sharing private data for AI model training without their consent.

What Happened: The class action lawsuit, filed in San Jose, California on Tuesday seeks damages for breach of contract and violations of California’s unfair competition law.

It also demands $1,000 per person under the federal Stored Communications Act, reported Reuters.

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The lawsuit alleges that LinkedIn quietly introduced a privacy setting last August, allowing users to control data sharing. However, the platform updated its privacy policy on Sept. 18, stating data could be used for AI training.

In a “frequently asked questions” hyperlink, it was stated that opting out would not impact training that had already occurred.

The complaint accuses LinkedIn of attempting to “cover its tracks” by updating its policy, suggesting the company knowingly violated privacy agreements.

LinkedIn has dismissed the claims as “false” and “without merit.”

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Why It Matters: AI startups OpenAI and Anthropic have also faced allegations of disregarding web scraping regulations. Elon Musk’s social media platform, X, formerly Twitter, was revealed to be sharing user posts with xAI's Grok for training purposes.

Last year, LinkedIn reported a 10% year-over-year revenue increase in the first quarter. The platform highlighted the role of its AI-powered tools in changing how professionals sell, learn, and hire.

In sales, new AI features are helping teams emulate top performers and achieve more profitable growth. In hiring, LinkedIn introduced its first AI agent, Hiring Assistant, designed to streamline recruitment by automating time-intensive tasks.

Microsoft reported first-quarter revenue of $65.60 billion, reflecting a 16% year-over-year increase.

Price Action: Microsoft’s stock climbed 4.13% on Wednesday, closing at $446.20. However, in after-hours trading, the shares dipped 0.27% to $445, according to data from Benzinga Pro.

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Photo by IB Photography on Shutterstock

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.