There is a whiff of anger in the air, it appears, over alleged price fixing between online travel agencies and hotels - with a class action being brought against some of the biggest travel brands on the planet in the US.
Documents filed in a California court yesterday by two individuals, Nikita Turik and Eric Balk, and on behalf of unnamed others outline an antitrust charge against a string of hotel brands and OTAs for what they allege is maintaining or reinforcing so-called minimum price maintenance (RPM).
The websites and companies cited are:
- Expedia
- Hotels.com
- Travelocity
- Sabre Holdings
- Booking.com
- Priceline
- Orbitz Worldwide
- Hilton Worldwide
- Starwood Hotels and Resorts Worldwide
- Marriott International
- Trump International Hotels
- Kimpton Hotel and Restaurant Group
- InterContinental Hotels Group
The action (headed by law firm
Hagens Berman Sobol Shapiro) claims OTAs "conspired" with hotel chains to create an RMP scheme that would "fix the retail price for room reservations" and therefore impact competition in the marketplace for other intermediaries.
The documents state that the OTAs are accused of leveraging their "substantial market power and dominance" to "induce" hotel chains to agreeing to participate on one of the following:
- Impose minimum resale price maintenance agreements on retailers.
- Enforce hotel-retailer agreements.
- Refuse to supply or cut off supply [product] to other competing retailers wishing to discount product.
While such arrangements refer to the OTAs ability to discount, wider marketplace issues are at the centre of the complaint as the alleged deals restrict other OTAs with their ability (or not) to discount hotel rates on their own sites.
The US case is essentially covering off the same ground, but the language in the class action is far more wide ranging than the current terms of reference outlined by the OFT.The companies cited in the class action are accused of being joined by others (unnamed so far) in what is said to be an industry wide conspiracy.
Sabre is also singled out as having "admitted" the scheme takes place, quoting a top PR official as saying (
and here) it is "standard industry practice".
It is performed in part "so that the customer can have the confidence that they will get the best rate, that they don't have to go on 18 difference sites", the documents outline.
The plaintiffs in the US case, Turik and Balk, are consumers based in Illinois and Iowa respectively.
image via Shutterstock.
NB2: Requests for comment from a number of the defendants have not been returned.