“The well-pled facts do not plausibly suggest that defendants entered into an industrywide conspiracy,” U.S. District Judge Jane J. Boyle in Dallas said in a ruling today tossing the case.
The plaintiffs, who bought hotel rooms across the U.S., claimed in more than two dozen consolidated cases that the companies agreed to prevent consumers from getting lower prices. The companies denied any attempt to fix prices.
Their victory could be short-lived as Boyle said she would permit the consumers to re-file, provided they tell her within 30 days how any proposed revised complaint would remedy the shortcomings in the one she threw out and that she agrees.
The hotels and travel companies allegedly made agreements preventing the hotels from selling rooms for less than the participating travel agents charged, causing consumers to pay “artificially inflated prices,” according to a May 1 complaint.
“The defendants’ ‘best price’ or ‘best rate’ guarantees are nothing more than a cover for their conspiracy to fix prices,” according to the complaint.
Single Suit
The lawsuits were filed in 2012 and later combined in a multidistrict litigation. The plaintiffs sought to turn the consolidated cases into a single suit on behalf of all consumers who paid for hotel rooms reserved through the defendants’ websites from Jan. 1, 2003, to May 1, 2013.
The class of transactions wouldn’t include reservations made as a part of a package deal, or where the name of the hotel wasn’t disclosed until after the reservation was paid for.
The defendants said the consumers’ allegations didn’t meet the standards for lawsuits claiming antitrust violations.
“There is nothing anticompetitive, much less unlawful, about a hotel setting specific pricing terms for its distributors so that it competes effectively with other hotels,” they said in their July 1 motion to dismiss. “Plaintiffs assert the novel proposition that a hotel must compete against itself.”
The online travel site defendants included Expedia, Hotels.com LP, Travelocity.com LP, Booking.com BV, Priceline.com Inc. (PCLN) and Orbitz Worldwide Inc. (OWW) The hotel defendants included Starwood, Intercontinental, Marriott International Inc., Trump International Hotels Management LLC and Hilton Worldwide Inc.
‘Interbrand Competition’
“The hotels can control the price of the rooms they offer,” Thomas Barnett, an attorney for the travel sites, said at a Dec. 17 hearing. “As long as there is interbrand competition going on, consumers don’t have to worry,” he said, referring to competition among hotels within a city or area.
The agreements with online travel sites allowed hotels to advertise the same price for rooms across multiple outlets, said Jeffrey Cashdan, representing Intercontinental Hotels Group Resources Inc., whose affiliates include Holiday Inns and InterContinental Hotels. “To call that price-fixing is absurd,” he said at the December hearing.
The case is In re On-Line Travel Company (OTC)/Hotel Booking Antitrust Litigation, 12-cv-3515-B, U.S. District Court, Northern District of Texas (Dallas).
To contact the reporters on this story: Andrew Harris in federal court in Chicago ataharris16@bloomberg.net; Tom Korosec in Dallas at tkorosec@bloomberg.net; Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
http://www.bloomberg.com/news/2014-02-18/hotel-room-online-price-fixing-lawsuit-dismissed-by-u-s-judge.html
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