Algorithmic Price-Fixing Case Dismissed in the Western District of Washington

Key Takeaways

• On August 29, Judge Lasnick of the U.S. District Court for the Western District of Washington dismissed the complaint in Portillo, et. al v. Costar Group, Inc., et. al (No. 24-cv-229-RSL).
• The court held that the allegations were insufficient to plausibly state a claim to relief because the information shared was not alleged to be sufficiently current or useable to support a claim for price-fixing. And the court observed that with no allegations of horizontal information sharing, a “hub-and-spoke” conspiracy was not adequately pled.
• The court granted the plaintiffs 30 days’ leave to file an amended complaint.

On August 29, the U.S. District Court for the Western District of Washington dismissed a putative class action complaint against Costar and several hotel defendants.[1] The complaint alleged that the hotel defendants use the same benchmarking software licensed from Costar. As alleged, under license agreements, the hotel defendants provide Costar with historical data, which it anonymizes and aggregates, and then provides benchmarking reports to the hotel defendants. The complaint alleged, via a confidential witness, that the benchmarking reports can be de-anonymized – but did not identify or allege any instances of this having actually happened in practice. And finally, the complaint did not allege any horizontal information sharing along the “rim” of the alleged hub-and-spoke conspiracy.

The court held that the Costar terms and conditions do not require subscribers to provide granular pricing information, and that there is no requirement that the data the hotel defendants supply must be current or the most recent available. So even if a particular hotel defendant could de-anonymize a Costar benchmarking report, there is no guarantee that it would receive current and/or useable data through its decoding effort. The complaint did not allege that price information from specific defendants was inputted then returned to specific others in an identifiable manner. And the court noted that there were no allegations of information sharing on the rim – i.e., horizontally from hotel defendant to hotel defendant. Thus, the complaint failed to plausibly allege both a traditional price-fixing conspiracy and a hub-and-spoke conspiracy.

However, the court granted the plaintiffs 30 days’ leave to amend, recognizing that antitrust conspiracies are complex and the plaintiffs may be able to re-plead more effectively in light of the court’s opinion. It suggested that some of the defects in the complaint may be cured by moving away from nebulous terms such as “pricing information” in favor of more concrete and clearly defined terms. The court also admonished the plaintiffs to account for the Ninth Circuit’s recent opinion in Gibson v. Cendyn Group, LLC, which affirmed the dismissal of a similar case alleging price-fixing via price recommendation software commonly used by several hotels on the Las Vegas Strip.[2] A third similar case alleging hotel price-setting via algorithm – concerning hotels in Atlantic City, New Jersey – was dismissed last year, and the appeal in that matter remains pending.[3] Plaintiffs’ counsel are facing the real likelihood of going “0 for 3” in these cases concerning the alleged algorithmic price-fixing of hotel rooms.

[1] Portillo v. Costar Grp., Inc., No. 24-cv-229-RSL, 2025 WL 2495053 (W.D. Wash. Aug. 29, 2025).

[2] Gibson v. Cendyn Grp., LLC, --- F.4th ----, No. 24-3576, 2025 WL 2371948 (9th Cir. Aug. 15, 2025).

[3] Cornish-Adebiyi v. Caesars Ent., Inc., No. 1:23-CV-02536-KMW-EAP, 2024 WL 4356188 (D.N.J. Sept. 30, 2024); Cornish-Adebiyi v. Caesars Ent., Inc., No. 24-3006 (3d Cir.).