A federal judge in Seattle has dismissed a lawsuit alleging that CoStar Group and several luxury hotel chains conspired to inflate hotel room prices through improper data sharing. The plaintiffs accused CoStar and hotel operators—including Hilton, Hyatt, and Marriott—of violating antitrust laws by exchanging pricing and occupancy data via CoStar’s Smith Travel Research (STR) reports, thereby controlling prices in cities such as New York and San Francisco.
U.S. District Judge Robert Lasnik ruled that the plaintiffs failed to provide sufficient evidence demonstrating that the hotels illegally coordinated pricing through STR. He noted that the reports did not directly input or output real-time room prices. Consequently, the judge granted the defendants’ motion to dismiss but allowed the plaintiffs the opportunity to amend and refile their complaint. CoStar and the hotel chains have denied any wrongdoing and welcomed the decision.
This ruling follows other recent legal successes for the hotel industry in similar price-fixing claims. For instance, a U.S. appeals court recently ruled in favor of a group of Las Vegas hotels accused of conspiring to overcharge guests. These decisions highlight the challenges plaintiffs face in proving antitrust violations in cases involving data sharing and algorithmic pricing.
In contrast, other courts have taken a different approach to algorithmic pricing cases. In December 2024, Judge Lasnik denied a motion to dismiss in a case involving Yardi Systems, where plaintiffs alleged that landlords used Yardi’s RENTmaximizer software to coordinate rental prices. The court applied the per se standard, indicating that such agreements are inherently anticompetitive. This divergence underscores the evolving legal landscape surrounding algorithmic pricing and data sharing in various industries.
As the legal community continues to grapple with these complex issues, the outcomes of such cases will likely influence future antitrust litigation involving data analytics and pricing algorithms.