CoStar, Hotel Chains Ask Judge To Toss 'Fanciful' Price-Gouging Lawsuit
CoStar Group and six major hotel brands named in a price-fixing lawsuit are asking a judge to drop the case, citing a lack of evidence and labeling the allegations “fanciful.”
The request comes on the heels of a February lawsuit brought by a group of renters who claim hotel operators conspired with CoStar to access sensitive information stored in a CoStar database to charge higher prices.
The defendants claim the plaintiffs aim to mimic a wave of antitrust lawsuits targeting algorithmic pricing, according to Reuters. The charges mirror similar price-fixing allegations leveled across more than 30 class-action lawsuits brought against RealPage and some of the nation’s largest owners of multifamily properties.
In a lawsuit filed in a Seattle federal court last week, attorneys claimed CoStar’s hotel benchmarking product, STR, involves neither algorithms nor pricing recommendations and that it only provides historical data related to occupancy and revenue.
“The Complaint is premised on the fanciful claim that STR’s benchmarking reports are vehicles for improper information exchanges among competitors and ‘price fixing in its modern form,’” the defendants’ lawyers wrote. “But the reality is that STR’s reports have been around since the late 1980s, and have been described by courts as ‘highly regarded and widely used.’”
But the plaintiffs insist the hotels — which include Hilton, Hyatt and Marriott — traded information about prices, supply and future plans, which allowed them to inflate prices beyond competitive levels in Washington, D.C., San Francisco, New York, Nashville, Chicago, Boston, Austin and other cities, Reuters reported.
Allowing the case to move forward could jeopardize the legitimacy of benchmarking reports, which are commonplace in the hotel industry, the defendants said.
A similar lawsuit was thrown out earlier this month by a Las Vegas judge who said the plaintiffs didn't provide enough proof that a group of hotels had colluded with tech company Cendyn to violate antitrust laws.
