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|Hotel Discount Website Price-Fixing Class Action Lawsuit|
- Wednesday, 22 August 2012 03:00
Hotel Discount Website Price-Fixing Class Action Lawsuit
By Sarah Pierce
Ever find it suspicious that every online hotel booking site offers the same hotel deal prices, almost down to the dollar? You’re not alone. A federal antitrust class action lawsuit claims that Expedia, Hotels.com, Travelocity.com, Orbitz, Hilton and others conspire to fix prices of hotel rooms sold online.
The class action lawsuit was filed by online discount travel site Skoosh.com, which alleges it was pushed out of the market by a “Mafia-style atmosphere and an intolerable climate for new business.” Skoosh claims it has been “directly threatened” to stop discounting hotels on its site below the rate set by the Defendants in an illegal “resale price maintenance scheme” or else face legal action from the Defendants. As a result, Skoosh has had to either raise prices or take hotels off their list.
According to the class action lawsuit, the online retailers hold more than a 50 percent market share in the internet travel business market and, “as a result of their dominance, and knowing that [hotels] cannot afford to lose access to their distribution network, the Online Retailer Defendants devised an illegal resale price maintenance scheme to combat new or more efficient Internet retailers.” This is allegedly accomplished by demanding that hotels not allow competing online retailers to discount from the Rack Rate, or else face the penalty of no longer being able to do business with Expedia, Hotels.com, Travelocity.com, Orbitz and other online retailers.
The online hotel booking conspiracy class action lawsuit goes on to allege that in 2004, multiple hotels, including Defendants Hilton and Kimpton, and online retailers, including Defendant Priceline, met together in Las Vegas for a Revenue Management and Pricing in Travel conference. “At the conference, Defendants Hilton, Kimpton and Priceline discussed ‘rate parity’ and ‘pricing strategies.’”
“As part of the Defendant Retailer-Hotel Agreements, the Hotel Defendants demonstrated their compliance by requiring that competing online retailers agree to raise and maintain retail prices at the Rack Rate. As a further sign of their agreement with the Online Retailer Defendants, in some instances, the Hotel Defendants threatened Online Retailers with legal action and/or refused to allow Online Retailers, such as Skoosh.com, to sell Room Reservations if the Online Retailers refused to price fix and maintain resale prices at the Rack Rate in compliance with the [resale price maintenance] scheme,” the antitrust class action lawsuit states.
The Defendants in the class action lawsuit are: Expedia, Hotels.com, Travelocity, Priceline.com, Booking.com, Orbitz, Hilton, Starwood, Marriott, Trump International Hotels, Kimpton, Sabre Holdings and Intercontinental.
The discount travel website monopoly class action lawsuit is brought on behalf of all persons and entities in the United States who paid for a room at a Defendant Hotel reserved through the Online Retailer Defendants. It is seeking damages for Class Members, penalties, and permanent injunctive relief to enjoin further violations of the law.
A copy of the Online Hotel Discount Website Antitrust Class Action Lawsuit can be read here.
The case is Nikita Turik, et al. v. Expedia, Inc., et al., in the U.S. District Court, Northern District of California.
Updated December 18th, 2012
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Last Updated on Thursday, 27 December 2012 11:09