Seven residents of California, Florida, Illinois and other states filed a lawsuit in Seattle federal court last week accusing commercial real estate information company CoStar, parent company of STR, along with a number of major hotel companies of conspiring to keep room rental prices artificially high.
According to Reuters, the suit—Jeanette Portillo et al v. CoStar Group et al, U.S. District Court for the Western District of Washington, No. 2:24-cv-00229—accuses the hotel companies of price fixing through data provided by STR. “Competitors in the luxury hotel industry have agreed to continuously share their detailed, audited [and] competitively sensitive information about their prices, supply and future plans through an intermediary,” the lawsuit claimed, referring to STR and CoStar. “The purpose of this exchange is for competitors to share ‘super-timely revenue and occupancy data’ so that competitors can ensure they are each getting their ‘fair share’ of revenues. In other words, the exchange of this information allows participating hotels to set prices higher than they would have been absent this agreement to exchange information. This is price fixing in its modern form and is illegal under the Sherman Act,” an antitrust law meant to preserve “free and unfettered competition as the rule of trade.”
The lawsuit argues that competitors sharing data–“even through a third-party intermediary” like STR–could have anticompetitive effects. “As Principal Deputy Assistant Attorney General Doha Mekki of the Antitrust Division cautioned, ‘exchanges facilitated by intermediaries can have the same anticompetitive effect as direct exchanges among competitors. In some instances, data intermediaries can enhance–rather than reduce–anticompetitive effects.”
The suit seeks damages under U.S. antitrust law for alleged room price overpayments, and claims defendant hotel companies—including Marriott, Hilton, Hyatt, IHG, Loews and the U.S. subsidiary of Accor—shared prices, supply and future plans, allowing participating companies to use rivals’ strategic information to inflate prices in major markets. The plaintiffs are seeking class-action status for potentially hundreds of thousands of people who rented rooms from a defendant or alleged co-conspirator hotel from Feb. 21, 2020, through the present.
The plaintiffs’ law firm, Hagens Berman Sobol Shapiro, has reportedly brought similar data-related price-fixing lawsuits against hotels in Las Vegas and rental property management companies. Those cases have not yet been decided.