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Lawsuit: 6 hotel chains conspired to eliminate competing web ads

A proposed federal class action claims that six top hotel chains are entering into an illegal anti-competitive agreement. In 2015, the lawsuit says, Hilton, Hyatt, Marriott Wyndham, InterContinental and Choice Hotels agreed not to compete with each other in online keyword-based advertising. The scheme was deceptive and created an unlawful restraint on trade, the suit claims.

The six chains operate some of the best-known hotels and motels in the U.S., including Comfort Inn, Hampton Inn, DoubleTree, Park Hyatt, Holiday Inn and Travelodge. The alleged scheme affected some 60 percent of all hotel inventory in the U.S. The alleged misconduct may have affected any consumer who booked a hotel or motel room between 2015 and 2017.

According to the lawsuit, the lead plaintiff noticed that when she searched for Marriott hotels on Google, her search results came back with competing brands eliminated. The same was true for other hotels. A search for "Hilton" would exclude results for Hyatt hotels and vice versa, she said. These exclusions were the result of the 2015 agreement between the hotels.

She claims that the six brands also froze out online travel agencies such as Expedia and Priceline. Ultimately, the lead plaintiff ended up booking her rooms directly through each brand's website. She claims she paid more per room that way because she could not find a way to obtain competitive pricing information.

"The effect of these agreements was to impair competition, resulting in direct harm to consumers in interfering with the free flow of information from sellers to buyers, raising the costs to consumers of finding the most suitable offering, increasing transaction prices, and raising the price of hotel rooms sold online by reducing the downward pricing pressure exerted by [online travel agencies] and each other," reads the complaint.

Ultimately, the agreement amounts to deceptive advertising, bid rigging and unreasonable restraint on trade, the lawsuit claims. The lead plaintiff hopes to represent a class of affected consumers and obtain compensatory damages, costs and an injunction against the hotels keeping them from continuing to operate under the anti-competitive agreement.

This lawsuit is in early stages and has not yet been certified as a class action. If you booked a hotel or motel room between 2015 and 2017, you may have been affected by this allegedly illegal agreement by the six major chains. You should keep a lookout for further developments or contact a consumer protection attorney for a case evaluation.

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