DOJ Pushes AI Price-Fixing Argument in Vegas Hotel Case Appeal
The Justice Department is promoting a legal theory that mere use of price-setting algorithms among competitors should be considered unlawful, even if places like Las Vegas hotels don’t actually use them to set final prices.
Late last week, the DOJ filed an amicus brief backing consumer plaintiffs at the US Court of Appeals for the Ninth Circuit. They are appealing a federal district judge’s dismissal of claims that Caesars Entertainment Inc. and other Vegas hotel companies used algorithms to fix room prices.
The Ninth Circuit will be the first appellate court to consider how antitrust law applies to algorithmic price-fixing arrangements and put the DOJ’s theory to the test. The appellate court will consider whether the use of a software provider’s pricing recommendations can still be unlawful if the allegedly colluding companies used the software at different times and didn’t adhere to the machine-suggested prices.
“It’s a way for DOJ to put a stake down,” said Kathleen Bradish, vice president and director of legal advocacy for the American Antitrust Institute, which also filed a brief supporting plaintiffs in the Las Vegas case. “Judges know there is something new going on in terms of what this kind of software does and what information-sharing looks like in this era, but they also have to understand how that relates to the existing precedent.”