On October 24, a Nevada federal court dismissed a class action complaint against operators of hotels on the Las Vegas Strip alleging that defendants’ use of similar room-pricing algorithms constituted a per se illegal price-fixing agreement under Section 1 of the Sherman Act. The decision, Gibson v. MGM Resorts International, No. 2:23-cv-00140 (D. Nev. 2023), rejected plaintiffs’ allegations of a per se illegal agreement among competitors or a hub and spoke conspiracy but granted leave to amend to plead a Rule of Reason theory.
Algorithmic pricing refers to the use of software tools, typically offered by vendors, that include historical and/or contemporaneous data to dynamically propose prices to businesses. In Gibson, plaintiffs alleged that Las Vegas hotel operators Caesars, Treasure Island, Wynn, and MGM violated Section 1 by “agreeing to all use pricing software marketed by the same company” resulting in “higher prices for hotel rooms than the market could otherwise support.” Continue Reading Brief Stay: Vegas Hotel Case Dismissed