Hotel-Casino Rulings Reveal Flaws in AI Price-Fixing Allegations

Antitrust attorney Kenneth Racowski was interviewed by Bloomberg Law about the dismissal of a price-fixing case against hotel-casinos and what the ruling could mean for other cases concerning the use of algorithmic software. Judge Karen M. Williams of the U.S. District Court for the District of New Jersey dismissed a lawsuit accusing Atlantic City hotel-casinos of inflating room rates through the use of Rainmaker software; her decision comes after a May 2024 ruling tossing similar claims against Las Vegas hotel-casinos. Together, the decisions help provide clarity on how the judiciary will evaluate future cases alleging that using algorithmic software violates antitrust law. Mr. Racowski noted a key component of each opinion was that the plaintiffs did not specify how exactly information is used after being entered into a price-setting database or whether confidential information is shared with competitors. In the Atlantic City case, for example, the plaintiffs claimed hotel-casinos "knowingly provided" nonpublic room pricing and occupancy data to Rainmaker but did not explain what happened to that data after being inputted.

"They are going to have to have some documents or technical specs on how the software works or they are going to have a confidential informant that tells them that," he said.

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