A lawsuit filed in San Francisco on Wednesday — Valentine’s Day — asserts that dating apps Tinder and Hinge are intentionally designed to make their users addicts.
The suit — filed as a class action against Match Group Inc, the Dallas-based company that is owner of a bevy of dating platforms — begins by stating that the dating apps “have altered social reality. A millennium of traditional courtship has been replaced by technology.”
The 58-page complaint then proceeds in sweeping fashion to make the case that as online dating has made it convenient for people seeking to find connection through relationships, the users have paid a weighty price.
In the plaintiffs’ words, “The truth is the apps are designed to be addictive.”
Addictive by design
The legal theory is that the intentionally addictive aspects of the platforms are not disclosed to the consumer in violation of false advertising and unfair competition laws in California and elsewhere.
The complaint says Match Group “affirmatively represents the Platforms as effective tools for establishing off-app relationships while secretly doing everything in its power to capture and sustain paying subscribers and keep them on-app.”
The complaint also invokes traditional product safety laws by calling the addictive feature of the apps a “design defect” and the apps “defective products.”
Earning particular opprobrium in the complaint is Hinge’s self-branding as the “dating app that is designed to be deleted,” a reference to the goal of getting people into meaningful relationships where they no longer require a dating app.
According to the complaint, Hinge’s business model is built to further exactly the opposite goal: “Defendant must consistently deliver addictive product features to retain subscribers and stay in business.”
In a particularly sharp statement, the complaint contends that even getting new subscribers is less profitable than “turning existing customers into addicts.”
Gamifying dating platforms
The plaintiffs contend that Match Group “employs recognized dopamine-manipulating product features to gamify the Platforms to transform users into gamblers locked in a search for psychological rewards that Match makes elusive on purpose.”
Examples of the strategy are the use of “push notifications” that alert a user to action when they are not using the platform, and incentive rewards that allegedly “punish users from disengaging and reward compulsive users.”
The alleged plan to create users addicted to dating platforms is succeeding, according to the complaint, citing various surveys that purport to show levels of use.
The plaintiffs are six individuals who have all purchased subscriptions to Tinder and/or Hinge.
Burak Oksayan of San Francisco, for example, allegedly purchased a Tinder Gold monthly membership for $19.99 and a Tinder Platform weekly membership for $24.99.
With a Tinder Gold membership, the user is able to “See Who Likes You and match with them instantly,” while Tinder Platinum status lets one “Upgrade your Likes and Super Likes.” (Super Likes communicate a greater level of interest than by merely swiping right.)
Match Group dismissive
A Match Group spokesperson took a swipe at the lawsuit in a statement.
“This lawsuit is ridiculous and has zero merit. Our business model is not based on advertising or engagement metrics. We actively strive to get people on dates every day and off our apps. Anyone who states anything else doesn’t understand the purpose and mission of our entire industry,” the spokesperson said.
Match Group is a dominant player in the dating industry. It owns eight of the top online dating brands. Tinder and Hinge are the largest but other brands include Plenty of Fish, OkCupid, Match, and Pairs.
Match Group claims that 40% of all relationships in the U.S. start online and 50% of those relationships began on one of its products.
The class action lawsuit comes at a sensitive time.
Match Group revenues
Match Group is a publicly traded company and like many companies on the major exchanges, it maintains a section of its website for “Investor Relations.” The section contains the latest financial information and items of interest to investors, potential investors and business analysts.
The information on that section includes a January 2024 letter to shareholders reporting on 2023 financial performance and commenting on key metrics for the business.
Revenue in 2023 was up 6% to $3.365 billion.
Tinder and Hinge accounted for more than 70% of revenue, and the lion’s share of that was attributable to Tinder.
Tinder seemingly had a robust year financially with revenues growing 11% compared to 2022. The letter notes the revenue per payer increased 21%, partially as a result of “pricing optimizations.”
Not all was upbeat, however.
Despite the revenue gains, there was a 5% loss of payers (users who purchase services) in 2023. When Match Group announced those user losses, its stock plunged from a 2023 high of $49.24 to $27.85 in November of the year.
The stock price has partially climbed back — it was trading at $37.48 late in the day on Thursday — as the company focused on reversing the user loss trend.
Aiming at younger daters
The company plans to do that by focusing on updating the “dating journey” for a new generation of daters.
In 2024, Match Group intends to “focus on shaping an in-App experience that resonates better with today’s younger users. Tinder is still the first dating app used by most 18- and 19-year-olds and must remain relevant for these new category entrants.”
There are a number of parts to Match Group’s strategy of “seizing the next phase in dating.”
AI integration
One key plan is to use artificial intelligence to improve its products. The company said, “We believe that by combining AI’s capabilities with our unparalleled data and understanding of human connections, we can provide more personalized matchmaking and enhanced discovery mechanisms throughout the dating journey.”
The company expects that “as AI learns user behaviors, our existing matching algorithms will become more refined which, in turn, should enable even more positive user outcomes.”
The company’s letter gives some ideas how this will work: “The dating app journey begins with profile creation, which can be awkward for many users.”
Tinder wants to use AI to help “daters curate their photos and bios to better showcase who they are” and is testing an “AI-powered photo selector, which will help new users choose higher quality profile photos within seconds.”
The company predicts that as a result of its efforts, the payer trends at Tinder will turn positive in 2024.
Court familiar with tech lawsuits
The lawsuit has been assigned to U.S. Magistrate Judge Laurel Beeler of the U.S. District Court for Northern District of California, the same court where the Social Media Adolescent Addiction/Personal Injury Products Liability Litigation is pending.
That case is multi-district litigation against Meta (owner of Facebook and Instagram), Snap (owner of Snapchat), ByteDance (owner of TikTok), and Google (owner of YouTube).
Federal lawsuits against those companies from all over the country have been consolidated in San Francisco for pre-trial proceedings.
The suits allege that the defendants have caused many young people to become addicted to social media platforms, causing profound damages to their mental health and wellbeing.
While the Match Group and Social Media lawsuits are in different industries, both have the issue of addiction to online platforms at their core.
Barbara Terrio is a seasoned business journalist, delving into the world of finance, startups, and entrepreneurship. With a knack for demystifying complex economic trends, she helps readers navigate the business landscape. Outside of her reporting, Barbara is an advocate for financial literacy and enjoys mentoring aspiring entrepreneurs.
