Published on: October 25, 2024, 05:05h. 

Last updated on: October 25, 2024, 05:05h.

The Department of Justice (DOJ) is supporting consumers in their fight to reinstate a class-action lawsuit against major Las Vegas hotel chains. The lawsuit alleges that these hotel chains shared data through algorithms, leading to artificially elevated room rates.

This development is a positive sign for the lawsuit that was initially dismissed in May, providing Caesars Entertainment, MGM Resorts, Wynn Resorts, and Treasure Island with a victory. (A similar lawsuit in Atlantic City was also dismissed recently.)

Although federal courts previously ruled against plaintiffs claiming price-fixing, this new support from the DOJ opens up the possibility of changes in the way Las Vegas casino resorts operate. The Sherman Act prohibits companies from engaging in monopolistic practices, including conspiring to monopolize a market.

DOJ Statement

In a recent amicus brief filed with the 9th US Circuit Court of Appeals, DOJ attorneys expressed concerns about the use of algorithms by competitors to set prices. They stated that this practice could facilitate collusion and pose new risks for consumers.

The DOJ argued that legal errors were made in the original dismissal of the suit and should be reconsidered. The ruling could impact future antitrust claims involving pricing algorithms, according to the DOJ.

While the DOJ is not a party to the lawsuit, it occasionally intervenes in cases deemed to be in the public interest.

The price-fixing lawsuit was initiated in January 2023 by the law firm Hagens Berman Sobol Shapiro. It alleges that major Las Vegas casino companies colluded to inflate hotel room rates using Cendyn software, violating antitrust laws.

All parties involved have denied any wrongdoing. The appeal process is underway, and a decision is expected next year after a three-judge panel reviews the case.

Plaintiffs in the Atlantic City case are also planning to appeal the recent decision.