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Algorithms might help hotels illegally collude on prices, even if no humans from those businesses actually talk to each other about them, according to US antitrust enforcers.<\/p>\n<\/div>\n
The Department of Justice and Federal Trade Commission jointly submitted a statement of interest in Cornish-Adebiyi v. Caesars Entertainment, <\/em>a case brought before the US District Court of New Jersey. The class action case was brought by New Jersey residents who rented rooms in Atlantic City hotels and alleged that several of those hotels engaged in an illegal price-fixing conspiracy through the use of a common pricing algorithm.<\/p>\n<\/div>\n The plaintiffs are trying to show that the hotels violated Section 1 of the Sherman Act, which prohibits \u201cconspiracy in restraint of trade\u201d and is used to prosecute illegal price-fixing. They say that the hotels allegedly used a pricing algorithm platform called Rainmaker, knowing that their competitors were also using the platform and choosing it for that reason.<\/p>\n<\/div>\n The agencies really care about how this issue is handled. \u201cJudicial treatment of the use of algorithms in price fixing has tremendous practical importance,\u201d the DOJ and FTC write in their statement. They\u2019ve already filed similar statements in other algorithmic price-fixing cases, like in one lawsuit against rental property management software company RealPage. Tenants have accused the company of contributing to higher rental prices through its access to and use of nonpublic pricing data from landlords.<\/p>\n<\/div>\n In the hotel case, the DOJ and FTC are challenging two claims that the hotels have made to try to get the lawsuit dismissed. One claim is that the plaintiffs needed to allege that the hotels directly communicated with each other in order to plausibly prove a Sherman Act violation. And the other is that the suit should be dismissed because the pricing algorithm only produced recommendations, not binding price requirements. <\/p>\n<\/div>\n The enforcers say that these are wrong. \u201c[T]here is no legal requirement that a plaintiff must allege specific communications directly among competitors merely to allege an agreement subject to Section 1,\u201d they write. \u201cSo long as the algorithm provider and its competitor clients are connected through this common agent in \u2018a unity of purpose or a common design and understanding,\u2019 … \u00a0they are acting in concert.\u201d<\/p>\n<\/div>\n They also say that it doesn\u2019t matter that the algorithm\u2019s recommendations were non-binding. They say that precedent for Section 1 of the Sherman Act shows that fixing list or sticker prices is illegal, \u201ceven where the ultimate prices charged are different.\u201d<\/p>\n<\/div>\n \u201cDefendants\u2019 position also is inconsistent with case law stating that the violation is the agreement \u2014 not how often it is followed,\u201d the agencies write. They added that based on the hotels\u2019 perspective, a price-fixing cartel could seek to avoid punishment \u201csimply by inviting participation by some competitors who tend to deviate from the fixed prices or by agreeing to allow some deviation.\u201d<\/p>\n<\/div>\n[ad_2]\n","protected":false},"excerpt":{"rendered":" [ad_1] Algorithms might help hotels illegally collude on prices, even if no humans from those businesses actually talk to each other about them, according to US antitrust enforcers. The Department of Justice and Federal Trade Commission jointly submitted a statement of interest in Cornish-Adebiyi v. Caesars Entertainment, a case brought before the US District Court …<\/p>\n","protected":false},"author":1,"featured_media":33935,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"_links":{"self":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts\/33934"}],"collection":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/comments?post=33934"}],"version-history":[{"count":0,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts\/33934\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/media\/33935"}],"wp:attachment":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/media?parent=33934"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/categories?post=33934"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/tags?post=33934"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}