Caesars Entertainment, Hotel Room Price-Collusion, New Jersey 2024

Caesars Entertainment, a major player in the hotel industry, has been accused of colluding with other hotels to fix room prices. The Federal Trade Commission (FTC) and the US Attorney's Office for the District of New Jersey joined forces to file a statement of interest in the case of Cornish-Adebiyi v. Caesars Entertainment, highlighting the dangers of algorithmic price-fixing.

The case centers around the use of algorithms to determine room prices, which can make it difficult for consumers to comparison shop. The agencies argue that when a small group of algorithm providers can influence a major segment of a market, competitors can use the algorithm provider to facilitate collusion, ultimately harming consumers.

The statement of interest explains that hotels cannot collude on room pricing and cannot use an algorithm to engage in practices that would be illegal if done by a real person. The agencies highlight two key aspects of competition law: first, plaintiffs do not need to identify direct communications between competitors to allege an agreement under Section 1 of the Sherman Act; and second, an agreement to use shared pricing recommendations, list prices, or pricing algorithms is still unlawful even when co-conspirators retain some pricing discretion.

The agencies have a strong interest in protecting consumers from algorithmic collusion, and their statement provides guidance to any firm that uses an algorithm to set prices. This is not the first time the agencies have taken action against algorithmic price-fixing. In 2022, the Justice Department's Antitrust Division filed a statement of interest and memorandum of law in a real estate algorithmic price-fixing case, and the agencies recently filed a statement of interest in an algorithmic price-fixing case in the residential housing market.

Caesars Entertainment is accused of using an algorithm to set prices and collude with other hotels. While the company has not been charged with any crimes, the agencies' statement of interest highlights the potential risks of algorithmic price-fixing and the need for companies to comply with competition law.

The case is ongoing, and it remains to be seen what the outcome will be. However, the agencies' statement of interest serves as a warning to companies that use algorithms to set prices: the risks of algorithmic price-fixing are real, and companies must ensure that they comply with competition law.

**Defendant:** Caesars Entertainment

**Criminal Charges:** Collusion, price-fixing

**City and State:** District of New Jersey

**Date:** No specific date mentioned, but the case is ongoing

**Sentence or Outcome:** No sentence or outcome has been announced yet

**Dollar Amounts:** No specific dollar amounts were mentioned in the statement of interest.

Source: https://www.justice.gov/archives/opa/pr/justice-department-and-federal-trade-commission-file-statement-interest-hotel-room