Consumers seek second chance in Las Vegas hotel price-fixing lawsuit
By Mike Scarcella
Sept 27 (Reuters) -Consumers suing major Las Vegas resorts over room rates have asked a U.S. appeals court to reinstate their lawsuit, calling the case an important test for mounting antitrust claims against companies that share data using computer algorithms to guide pricing decisions.
In a filing in the 9th U.S. Circuit Court of Appeals on Thursday, the consumers argued they had presented enough evidence of illegal price-fixing to let the proposed class action move forward against defendants Wynn Resorts, Caesars, Treasure Island and others.
A Nevada federal judge dismissed the lawsuit in May. The plaintiffs had accused the hotel owners of colluding to overcharge guests by feeding sensitive internal information to a shared software platform that offered pricing recommendations.
“Today, competitors can use algorithms to collude more easily and effectively than in the past,” the plaintiffs told the San Francisco-based appeals court. They said the Nevada trial judge’s order “would effectively immunize algorithmic price fixing from antitrust scrutiny” if left in place.
Cendyn, Wynn Resorts, Caesars and Treasure Island either declined to comment or did not immediately respond to requests for one. The plaintiffs’ lawyers did not immediately respond to a similar request.
The hotels and software provider Cendyn have denied any wrongdoing.
The consumers’ lawsuit is part of a growing number of cases claiming hotels and other industries unlawfully use revenue maximization platforms to fix prices. A similar complaint against hotels in Atlantic City is pending in New Jersey federal court.
In the Las Vegas case, Chief U.S. District Judge Miranda Du dismissed the lawsuit after finding it failed to show that the hotels were using Cendyn's Rainmaker platform at the same time.
Du also said the system generated pricing recommendations that hotels were not bound to follow. She said the hotels had not agreed with each other to restrict how they price their rooms.
The consumers in their appeal countered that even non-binding guidelines such as price recommendations can be considered an “unreasonable” restraint within a competitive market.
They argued that the lawsuit hinges on whether the hotels' use of the platform disrupted competition, regardless of whether the companies followed its recommendations.
The case is Richard Gibson et al v. Cendyn Group et al, 9th U.S. Circuit Court of Appeals, No. 24-3576.
Read more:
U.S. Justice Department accuses RealPage of driving up rents
Las Vegas hotels defeat price-fixing class action over room rates
CoStar, luxury hotels hit with US consumer price-fixing lawsuit
Renters suing RealPage get US backing in pricing lawsuits
Reporting by Mike Scarcella
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