Amicus Brief - Casino-Hotels Algorithmic Price-Fixing Case, Cornish-Adebiyi v. Caesars

The Open Markets Institute filed an amicus brief in Cornish-Adebiyi v. Caesars, a case before the Third Circuit court in which casino hotels in Atlantic City allegedly used revenue management software from Cendyn Group to fix prices at high rates. Open Markets filed an amicus brief last fall in Gibson v. Cendyn Group, a similar case of software-enabled price-fixing among Las Vegas casino-hotels.

In both briefs we urge the courts to apply longstanding law against collusion between competing firms, regardless of whether they do so directly or through a third party – the software.

In Cornish-Adebiyi v. Caesars, we argue the district court got it wrong: Casino-hotels were not acting independently when they used Cendyn’s software to raise hotel prices to supercompetitive levels, which is a per se price fixing violation. 

We also argue that exchanging documents and/or pooling non-public information into a common data set in the algorithm is not a required element to show the existence of a conspiracy. What matters is whether competitors centralized their decision-making process.

“The evidence shows that Atlantic City casinos were not acting independently when they used Cendyn’s price-setting algorithm to raise hotel rates. If this were a competitive market, the casinos would have cut their hotel room prices in order to attract more guests when their competitors raised their rates to supercompetitive levels,” said Open Markets policy counsel Tara Pincock. “Instead, the casinos raised rates simultaneously while also reducing occupancy rates – behavior that only makes sense if the casinos were committed to a common, illegal scheme to fix prices.”

Read the full brief here.

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