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This could put a chill into organizers of travel conferences: A purported class-action lawsuit alleging price-fixing among online travel agencies and hotels has added EyeForTravel, the UK-based conference company, as a defendant.
The lawsuit alleges that EyeForTravel “facilitated the conspiracy and agreements at issue” from 2004 to 2012 by conducting “private, industry-only conferences” in which presentations and discussions covered various hotel pricing strategies, and the need to enforce rate parity in all distribution outlets.
“There is no pro-competitive reason for competitors to be discussing restrictions on pricing, and such discussions provide a strong inference that these conferences were settings for reminding all there there would be no price competitions,” alleges the amended complaint, filed by lead firm Hagens, Berman, Sobol and Shapiro.
The amended complaint, filed May 1 in federal court in Dallas, also adds Wyndham Hotel Group, Carlson Hotel Group, Best Western, Choice Hotels, and Hyatt Hotels to its roster of hotel (Starwood, Marriott, Trump, Hilton and Kimpton), and online travel agency (Travelocity, Expedia, Hotels.com, Priceline.com, Booking.com, and Orbitz) defendants.
The amended complaint consolidates several similar lawsuits, which date to August 2012. They allege that OTAs and hotels conspire to fix prices in “rate parity” agreements, and that these practices violate federal and state antitrust laws. The impact is consumers get ripped off because they would otherwise be able to find cheaper room rates.
Under these agreements, hotels can’t offer lower rates on their own websites than they provide to online travel agencies, and hotels can’t rooms at cheaper rates through one online travel agency or another.
The amended complaint doesn’t offer much detail about what actually took place during sessions at the EyeForTravel conferences to further an alleged “conspiracy” other than to cite the names of conference attendees and descriptions of various sessions.
For example, the suit notes that a 2005 EyeForTravel conference in Chicago saw representatives of Expedia, Travelocity, Sabre, InterContinental, Starwood and Marriott as attendees, and conference presentations included one on “Pricing Strategies, Restrictions and Elasticity.”
The suit alleges that hotels provide OTAs virtually identical rates, and the EyeForTravel conferences provided a means to “signal” the need to maintain agreements and the conspiracy.
OTAs that could get cheaper rates from wholesalers were threatened with punitive actions, the suit alleges.
The amended complaint indicates that its list of defendants is a work in progress so perhaps additional travel industry conference companies will eventually be included as defendants because rate parity issues have been discussed at countless industry events.
The plaintiffs seek to have the suit designated as a consumer class-action, and they are demanding a permanent injunction against these hotel-OTA rate-parity practices, and monetary damages.
UK authorities are also investigating these practices.
EyeForTravel did not respond to a request for comment.