Expedia, Hotels Ask Judge to Dismiss Online Price-Fixing Class Actions

Expedia Inc. and Starwood Hotels & Resorts Worldwide Inc. have asked a Texas federal judge to dismiss multidistrict litigation (MDL) that accuses them of conspiring with other travel websites and hotels to fix prices for hotel rooms. They argue that the plaintiffs failed to allege an actual conspiracy and that their complaint doesn’t meet proper pleading standards to continue as a consolidated class action case.

Dozens of antitrust class action lawsuits accusing Expedia, Priceline, Hilton and other companies of conspiring to fix the prices of hotel rooms sold through online travel sites were consolidated into one hotel price-fixing MDL in December 2012. The plaintiffs in these class action lawsuits claimed that the companies conspired together to keep consumers from getting lower room rates.

The plaintiffs filed the class action lawsuits seeking to represent a class of nationwide consumers who paid an inflated price for a hotel room due to the alleged price-fixing scheme. The proposed class includes all people throughout the United States who paid for hotel rooms that were reserved through the defendants’ websites between Jan. 1, 2003 and May 1, 2013.

The hotels named in the online travel company price-fixing class action lawsuit include Hilton Worldwide, Marriott, Starwood Hotels & Resorts, Kimpton Hotel & Restaurant Group, InterContinental Hotels Group and Trump International Hotels Group.

In June 2013, U.S. District Judge Jane J. Boyle ruled that the plaintiffs must arbitrate their disputes with Travelocity LP under the terms of its user agreement. She found that, because users must agree to Travelocity’s terms prior to booking a hotel room through the website, the plaintiffs are bound to the arbitration clause.

On Tuesday, the defendants argued that they have the right to set prices for their hotel rooms and have denied any conspiracy to fix prices. In their motion to dismiss the hotel price-fixing MDL, they argued that the ability to post available hotel rooms across multiple travel sites make the prices more competitive because consumers have the ability to quickly and directly compare rates.

The defendants claim that they did not engage in any horizontal, industry-wide conspiracy to inflate hotel room prices. They argued that the plaintiffs’ allegations were not sufficient to meet the standards required to bring antitrust lawsuits.

An attorney for the plaintiffs argued that they successfully suggested a motive by claiming the online travel companies were concerned that they would be undercut by companies offering lower rates, and the hotels were concerned that the online travel companies could lower room rates by providing significant discounts.

The plaintiffs are represented by Hagens Berman Sobol Shapiro LLP, Stanley Iola LLP and Federmna & Sherwood, among others.

The Online Hotel Price-Fixing MDL is In re: Online Travel Company Hotel Booking Antitrust Litigation, Case No. 12-cv-03515, in the U.S. District Court for the Northern District of Texas.

UPDATE: A federal judge dismissed the online hotel price-fixing class action lawsuit on Feb. 10, 2014.