Tinder settles three-year battle against Match.
Tinder, an online dating application, where users anonymously ‘swipe right’ to like or ‘swipe left’ to dislike the profiles of others, has just settled a lawsuit filed against Match, a well-known dating website that has been around for many years. Match is set to pay $441 million from its cash reserves. As a result, Tinder co-creators will also dismiss the claims from both the lawsuit and linked arbitration.
In 2018, plaintiffs accused Tinder’s parent organizations Match and IAC of manipulating financial data to falsely lower Tinder’s value and illegally denying stock options to employees. The plaintiffs also alleged that one-time Tinder chief Greg Blatt sexually harassed marketing VP and co-founder Rosette Pambakian. In response to the lawsuit filed against the company, Tinder terminated its employees involved, and Pambakian separately filed suit against Blatt, IAC and Match.
Three years ago, during the upheaval, Tinder’s co-founders and many of its senior executives sought at least $2 billion in damages. The ten plaintiffs included co-founders Sean Rad, Justin Mateen, and Jonathan Badeen, as well as three executives, former executives and directors.
Attorney for the employees, Orin Snyder from the law firm Gibson, Dunn & Crutcher, at the time, “When it came time to pay the Tinder employees what they rightfully earned, the defendants lied, bullied, and violated their contractual duties, stealing billions of dollars. A jury will now hold the defendants responsible for their multibillion-dollar theft.”
According to the 2018 lawsuit, there were written contracts between IAC and the employees for Tinder to be valued on dates in 2017, 2018, 2020, and 2021 when they would be given the opportunity to exercise their stock options. Instead, however, IAC merged Tinder into Match Group in 2017 under the radar, which intentionally undervalued Tinder.
Match commented when the lawsuit was filed, “Since Tinder’s inception, Match Group has paid out in excess of a billion dollars in equity compensation to Tinder’s founders and employees. Match Group and the plaintiffs went through a rigorous, contractually-defined valuation process involving two independent global investment banks, and Mr. Rad and his merry band of plaintiffs did not like the outcome…We look forward to defending our position in court.”
Match also bought Hinge (along with roughly 25 other dating sites) which is a part of Tinder, in an effort to ensure that all markets are represented in its complex portfolio – according to the group. Never mind the shady accounting behind it all.
At the time of the Hinge acquisition, in a prepared statement, Mandy Ginsberg, CEO of Match Group, said, “Hinge is highly relevant particularly among urban, educated millennial women looking for relationships.”
Tinder’s founders aren’t so pleased with the result of their lawsuit. At the time of filing, the company wanted “billions of dollars” in damages, and now it is set to receive a fraction of that amount after paying for legal fees over the last three years.