Hotel chains, OTAs now face US lawsuit
Some of the largest hotel companies have allegedly conspired with online travel agencies to fix hotel prices, a lawsuit filed on Monday claims.
The suit, filed in a US District Court in San Francisco, alleges that Hilton Hotels, Sheraton Hotels & Resorts, Marriott International and others conspired with Expedia, Travelocity and a subsidiary of Priceline, among others, to fix hotel prices across the country, according to the Los Angeles Times.
The suit was filed by Seattle law firm Hagens Berman on behalf of two men, Nakita Turik from Chicago and Eric Balk of Cedar Falls, Iowa, who both booked hotel rooms using travel websites over the past two years. Hagens Berman has a long history of pursuing class-action consumer suits.
Many travel websites say they pass low hotel rates on to consumers by buying blocks of unsold rooms. But the lawsuit claims that as part of an agreement to work together, hotels set a minimum room rate that online travel websites could offer to consumers. Hotels agree to the fixed prices for fear of losing the business brought in by online travel websites, the suit claims.
“The large online travel sites, working with hotel chains, have created the illusion that savvy consumers can spend time researching hotel rates online to find good deals,” Steve Berman, managing partner and co-founder of Hagens Berman, said in a statement. “The reality is that these illegal price-parity agreements mean consumers see nothing but cosmetic differences and the same prices on every site.”
The suit asks the court to order the hotels and travel sites to pay unspecified damages and legal fees. It also asks the court to impose an injunction, preventing the hotels and websites from further price fixing
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