Consumers suing major Las Vegas hotels for alleged price-fixing have filed an appeal with the 9th U.S. Circuit Court of Appeals, seeking to reinstate their lawsuit. The appeal comes after a Nevada federal judge dismissed the case in May, a ruling the consumers argue undermines crucial antitrust protections in the digital economy.
In their Thursday filing, the plaintiffs contended that they have gathered sufficient evidence to support their claim that hotel chains, including Wynn Resorts, Caesars Entertainment, and Treasure Island, colluded to inflate room rates. The lawsuit asserts that these companies shared sensitive internal data through a software platform, allowing them to manipulate pricing strategies and overcharge guests.
The plaintiffs emphasized the rising challenges of algorithm-driven price collusion, stating, “Today, competitors can use algorithms to collude more easily and effectively than in the past.” They warned that if the lower court’s ruling remains, it could effectively shield algorithmic price-fixing from antitrust scrutiny, thus setting a dangerous precedent for consumer rights.
The original lawsuit alleged that the hotels utilized a shared software platform provided by Cendyn, known as the Rainmaker system, which offered pricing recommendations based on internal data. These practices, according to the consumers, represented a breach of antitrust laws aimed at promoting fair competition.
In dismissing the case, Chief U.S. District Judge Miranda Du indicated that the plaintiffs did not adequately demonstrate that the hotels were using the Rainmaker platform simultaneously or that they were contractually bound to adhere to its pricing recommendations. Du also pointed out that the hotels did not enter into explicit agreements to restrict their pricing strategies.
In response to the dismissal, the consumers asserted that even non-binding price recommendations can constitute an unreasonable restraint on competition. They believe that the core issue of the case revolves around whether the use of the Rainmaker platform disrupted competition in the hotel market, irrespective of whether the hotels adhered to its pricing suggestions.
The case highlights a growing trend of antitrust challenges against hotels and other industries accused of using advanced revenue management tools to manipulate pricing. A parallel lawsuit against hotel operators in Atlantic City is currently pending in federal court in New Jersey.
As the case unfolds, the outcome could have significant implications for how companies leverage technology in pricing strategies and the extent to which they can be held accountable for alleged anti-competitive practices.