Extract from Kat Black’s article “Seattle Federal Judge Grants CoStar’s Motion to Dismiss in Algorithmic Pricing Case”
A Seattle federal judge has granted CoStar Group Inc.’s motion to dismiss a long-running suit that accused the real estate research firm of conspiring to fix hotel room prices through information-sharing, clinching the latest win for defendants in a wave of “algorithmic pricing” litigation.
The order, handed down on Aug. 29 by U.S. District Judge Robert S. Lasnik in the Western District of Washington, held that the plaintiffs did not sufficiently plead direct evidence that hotel operator defendants in the suit had colluded to inflate hotel prices by sharing benchmarking reports provided to the hotel industry by CoStar subsidiary Smith Travel Research (STR). The court gave the plaintiffs leave to submit an amended complaint within the next 30 days.
Lasnik also concluded that plaintiffs failed to demonstrate a “hub-and-spoke” conspiracy between STR and the hotel operators, finding that they had not “shown that either the alleged hub or the alleged spokes are receiving any hotel room pricing information from, or giving any hotel room pricing information to, each other.”
Latham & Watkins represented CoStar Group and referred requests for comment to Gene Boxer, CoStar’s general counsel.
