Tech giant Microsoft’s (MSFT) LinkedIn is facing a proposed class action lawsuit for sharing its Premium customers’ private data for training AI (artificial intelligence) models. The lawsuit was filed on Tuesday, January 21, on behalf of millions of LinkedIn Premium customers, who allege that private messages and InMail data were shared without taking consent.
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Further Details of LinkedIn’s Class Action Lawsuit
The class action relates to private information shared before September 18, 2024 by the professional networking platform. Furthermore, plaintiffs allege that LinkedIn knowingly shared customer data for training AI models and tried to cover their tracks. In August last year, LinkedIn introduced a privacy setting that allowed users to select whether or not they wanted to share their personal data to improve the platform.
However, on September 18, the platform quietly updated the policy to include a clause that read that disabling the privacy data-sharing option “does not affect training that has already taken place.” The new clause was added under the “frequently asked questions” section.
The lawsuit alleges that LinkedIn updated its privacy norms in September to cover up any violation of data sharing and potential legal consequences. The class action suit is filed in federal court in San Jose, California. The financial damages for the breach of contract and violation are unspecified at the moment, but upon winning the lawsuit, the plaintiffs will each receive $1,000 for violations of the federal Stored Communications Act.
TipRanks’ Bulls Say, Bears Say Tool
As Microsoft prepares to report its Q2 FY25 earnings next week, analysts and experts have differing views on its performance. According to TipRanks’ Bulls Say, Bears Say tool, bulls are encouraged by Azure’s dominating position in the AI market and its growing demand as well as MSFT’s efforts to release AI agents through its Copilot Studio.
On the other hand, bears are concerned about the lower-than-expected guidance for Azure’s growth in Q2, losses from its investment in AI startup OpenAI, and weak return on massive capital expenditures.
Is MSFT a Good Buy Right Now?
Analysts remain highly optimistic about Microsoft stock. On TipRanks, MSFT stock commands a Strong Buy consensus rating based on 26 Buys and two Hold ratings. Also, the average Microsoft price target of $507 implies 13.6% upside potential from current levels. In the past year, MSFT shares have gained 12.7%.
