Second Price-Fixing Case Against Hotel-Casinos Dismissed by Federal Judge

A federal judge has dismissed a second case alleging price-fixing among hotel-casinos, paving the way for how courts will approach similar lawsuits involving algorithmic pricing software. According to Bloomberg, the ruling could reshape the legal landscape for cases alleging that technology facilitates illegal collusion.

U.S. District Judge Karen M. Williams of the District of New Jersey dismissed a lawsuit on September 30, which accused Atlantic City hotel-casinos of colluding to inflate room prices through the shared use of Cendyn Group’s Rainmaker software. This ruling follows a similar dismissal in May involving Las Vegas hotel-casinos, providing judges with additional precedents to consider when handling related cases.

Legal experts indicate that these decisions will impact the litigation strategies of both defendants and plaintiffs in forthcoming antitrust cases. William Kovacic, a law professor at George Washington University and former chair of the Federal Trade Commission, remarked, “There’s no doubt these have an impact on other district judges. The defendants in other cases, creators of the software, will look very carefully at these decisions to inform arguments.”

The dismissal has broader implications for the ongoing scrutiny of pricing practices in various sectors, including hotels, apartment management, and insurance. Private plaintiffs and U.S. enforcement agencies have increasingly targeted companies for alleged collusion facilitated by shared pricing databases. Earlier this year, the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) filed a statement of interest in a private antitrust class action against Yardi Systems, indicating that the use of pricing algorithms among competitors may violate Section 1 of the Sherman Act.

Read more: Atlantic City Casinos Face Price-Fixing Antitrust Suit

In August, the DOJ filed a separate lawsuit against RealPage, accusing the revenue management software provider of orchestrating a scheme to suppress competition in the apartment rental market. Currently, multidistrict litigation against RealPage is pending in Tennessee.

The recent rulings by Judge Williams and Chief Judge Miranda Du of the U.S. District Court for the District of Nevada are expected to clarify the evolving case law surrounding algorithmic price-fixing. Diana L. Moss, vice president and director of competition policy for the Progressive Policy Institute, highlighted that these cases contribute to the legal understanding of whether algorithms can be utilized to reach collusive agreements among competitors.

“The courts in the United States are pretty good at taking traditional principles and applying them to new settings,” Moss noted. “At the end of this, we are going to have a body of case law that answers many questions about whether algorithms can serve as a method of communication to fix prices.”

As the landscape of antitrust law continues to evolve in the digital age, these rulings underscore the complexities surrounding the intersection of technology and competition law. Per Bloomberg, the implications of these decisions are likely to resonate throughout ongoing and future litigation in the United States.

Source: Bloomberg