In yet another attempt to stretch antitrust law into new territory, the Federal Trade Commission (FTC) and Department of Justice (DOJ) released a joint statement of interest related to whether algorithmic pricing is a form of collusion by hotels. However, this joint statement relies on questionable legal arguments to sidestep the fact that the collusion requires proof of communication between the accused parties. Algorithmic pricing could benefit consumers and shouldn’t be treated as inherently suspect.
In Altman et al v. Caesars Entertainment, et al., the prosecution accused several hotels in the Atlantic City area of collusion through the use of Rainmaker software, which increases hotel revenue by automating pricing. They argued that when multiple hotels began using Rainmaker, they essentially participated in collusion to keep prices high for patrons.
Read Full Article »
