Judge Cancels Online Hotel Price-Fixing Class Action Lawsuit

A federal judge dismissed an online hotel price-fixing class action lawsuit, deciding that the plaintiffs in the case failed to articulate a conspiracy that could not plausibly exist as a result of parallel business practices.

In the original online hotel price-fixing class action lawsuit, plaintiffs argued that online travel agencies such as Expedia and hotel chains including Hilton Worldwide colluded to raise the rates of hotel rooms beginning in the early 2000s. This would have been a violation of the Sherman Antitrust Act and various state consumer protection acts, but the judge dismissed the first complaint without prejudice because the allegations of price-fixing were unpersuasive.

The second attempt to demonstrate price-fixing against the online travel agencies (OTA) also failed. In the order granting the motion to dismiss the online hotel price-fixing class action lawsuit, the judge noted that, “While Plaintiffs claim their ‘new’ conspiracy is fundamentally different than before, the reality is that it isn’t even new—the [first amended complaint] also alleged a horizontal agreement between the OTA Defendants that supposedly held together the then-at-issue conspiracy among the OTA and Hotel Defendants.”

Further, the Class Members already dropped the hotels including Hilton Worldwide from the second class action lawsuit. They still argued that the travel agencies like Expedia engaged in agreements with each other in order to artificially increase prices of hotel rooms because their resale price maintenance agreements with the hotels them were substantially the same.

In response to this argument, the judge wrote, “Like before, an ‘obvious’ alternative narrative of innocent, business-driven behavior is, at minimum, equally likely to explain the OTA Defendants’ parallel activities[.]” Nothing added to the new complaint added enough information to change that belief. In fact, the one piece of data that would help buttress the case was actually not what it seemed to be.

Further, the the new online hotel price-fixing class action lawsuit referenced articles that would seem to point to the online travel agencies having gained much more power and a dominant market position that would provide them the ability to control rates. However, the judge said that while the article from that time did note that “'[d]iscount hotel sites are increasingly popular,’ nowhere does it indicate that the OTA Defendants were dominant in the hotels booking market.”

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. 3:12-cv-03515, in the U.S. District Court for the Northern District of Texas.