Antitrust Lawyer Blog Commentary on Current Developments

Judge Dismisses Hotel Price Fixing Case

On February 18, 2014, U.S. District Judge Jane J. Boyle granted a motion by U.S. hotel chains and online travel agencies to dismiss without prejudice an antitrust case alleging consumers paid inflated prices on hotel rooms booked online.

Judge Boyle believed there to be two main arguments from the plaintiffs:  first, defendants conspired to restrain competition in the US market for “direct online sale of hotel room reservations” and second, the defendants’ advertisements guaranteeing the best price available online were unfair to consumers because the prices were actually the same across all online channels.

Judge Boyle rejected the plaintiff’s arguments on both counts because they were not based on sound evidence.  Instead, the plaintiffs only speculated as to the motive of the defendants.  For example, the plaintiffs argued that the defendants shared a common motive to eliminate price competition in the online market.  However, just because the defendants’ business interests can be recast in a suspicious light does not mean the allegations suggest an actual conspiracy was formed, noted the judge.

The defendants welcomed the dismissal of the case. “There is nothing anticompetitive, much less unlawful, about a hotel setting specific pricing terms for its distributors so that it competes effectively with other hotels,” they said in their July 1 motion to dismiss the lawsuit. “Plaintiffs assert the novel proposition that a hotel must compete against itself.”

Judge Boyle gave the plaintiffs 30 days to submit a motion to reinstate the case.

 

Mark Ye
202-589-1834
mye@dbmlawgroup.com