A recent ruling by a US judge has dismissed a class action lawsuit accusing Atlantic City casinos and hotels, including Caesars Entertainment and MGM Resorts International, of overcharging for room rentals. The lawsuit also targeted Cendyn, a revenue management software company, alleging price fixing through their software.
The lawsuit was based on the claim that hotel owners share real-time data, such as occupancy rates and room prices, with the software platform, which then provides pricing suggestions to operators. Plaintiffs argued that this sharing of data and pricing suggestions constituted price fixing, as it allegedly delegated pricing decisions to a third-party actor and disrupted the competitive market.
However, US District Judge Karen Williams ruled that the plaintiffs did not provide enough evidence to support their accusations. The judge dismissed the case with prejudice, meaning it cannot be filed again. She rejected the notion that using automated software for pricing recommendations constituted price fixing and noted that the plaintiffs had not proven that the recommended prices were based on pooled data.
The consumers in the lawsuit described Cendyn’s “Rainmaker” software as a shared pricing brain that does the pricing work for operators. They argued that the software allowed operators to delegate pricing decisions to a third party, undermining market competition. Despite these claims, Judge Williams found the plaintiffs’ antitrust theory to be factually and legally incomplete.
The judge highlighted that the sources quoted in the amended complaint did not indicate that the pricing recommendations were based on competitors’ confidential data. She also noted that the supply and demand data referenced by the plaintiffs appeared to be publicly available information, rather than proprietary data.
This lawsuit was just one of many cases accusing companies of price fixing through revenue management system software. A similar case in Nevada, involving operators like Caesars and Wynn Resorts, was also dismissed with prejudice. However, the Nevada case is currently under appeal by the plaintiffs.
Overall, the dismissal of the lawsuit against Atlantic City casinos and hotels, as well as Cendyn, highlights the challenges of proving price fixing allegations in the context of automated revenue management systems. The ruling by Judge Williams underscores the importance of providing sufficient evidence to support antitrust claims in court.