Rooms Hotels

U.S. Hotel Chains and Booking Sites Cleared of Price-Fixing Conspiracy Claim

Feb 19, 2014 8:00 am

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The antitrust lawsuit turned into a win for U.S. hotel chains and booking sites whose business practices were validated by the court.

— Samantha Shankman

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A group of major U.S. hotel chains and online travel companies on Tuesday won the dismissal of an antitrust lawsuit accusing them of an industry-wide conspiracy to fix the online prices of hotel rooms.

U.S. District Judge Jane Boyle in Dallas found that the lawsuit, brought by consumers who claimed they paid inflated prices for their rooms, failed to adequately show that such a conspiracy existed.

Instead, she said, the agreements between each hotel chain and each online operator could be explained by “rational business interests” rather than anti-competitive behavior.

The hotel companies include Starwood Hotels and Resorts Worldwide Inc, InterContinental Hotels Group Plc and Marriott International Inc while the online agencies include Expedia Inc, Orbitz Worldwide Inc and Priceline Com Inc.

A lawyer for the plaintiffs did not immediately respond to a request for comment on Tuesday night.

An Orbitz spokeswoman said the company was pleased with the decision, which she said was “well reasoned and accurately interprets applicable law.” A spokeswoman for Priceline declined to comment, while representatives for other hotel and booking companies did not respond to requests for comment outside U.S. business hours.

The lawsuit, which consolidated several complaints from various states, claimed that each hotel chain signed a deal with each online travel company to publish one lowest rate while also tacitly agreeing not to compete with one another, thereby creating “rate parity” and forcing consumers to pay artificially high prices.

The companies countered that the individual agreements were simply an attempt by each hotel chain to ensure that it could control the online prices for its rooms. In return, they said, the online agencies got assurance that their competitors would not be able to undercut them, an explanation that Boyle accepted.

“Just because defendants’ rational business interests can be recast in a suspicious light does not mean the allegations actually suggest a conspiracy was formed,” Boyle wrote.

Boyle said she would permit the plaintiffs to file an amended lawsuit if they could address the deficiencies she identified.

The case is In re Online Travel Company Hotel Booking Antitrust Litigation, U.S. District Court for the Northern District of Texas, 12-cv-3515-B.

Editing by Edwina Gibbs.

Copyright (2014) Thomson Reuters. Click for restrictions

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