Consumers filed antitrust class action against Expedia in Seattle

Consumers filed an antitrust class action against Expedia in Seattle, accusing the online travel agency of imposing exclusionary contracts and pricing algorithms to exploit customers, Courthouse News reported. The lawsuit claims that Expedia’s dominant market position forces hotels to raise rates on all booking channels, impacting travelers even if they use competing platforms.

Plaintiffs Seek to Represent Two Consumer Classes

Plaintiffs Ronisha Andrews, Pak Seong Hoi, and Lorraine Rocci filed the complaint to represent two distinct groups of consumers. The first class includes individuals who directly booked specific hotels after October 2022. The second class covers consumers who used a non-Expedia online travel agency to book a hotel during that same timeframe.

According to the plaintiffs, Expedia facilitates nearly 80% of the gross booking value for transactions between United States consumers and domestic hotels. We allege that Expedia has abused its monopoly power in the online travel agent market to inflate prices for hotel rooms to millions of consumers even when those consumers did not use Expedia, Eric L. Cramer, an attorney representing the consumers, said in a statement. We look forward to bringing our case before a jury in Seattle, and to holding Expedia responsible for harming the members of our proposed classes of hotel consumers.

Expedia Allegedly Forces Hotels to Inflate Room Prices

The lawsuit states that Expedia uses its market dominance to charge hotels steep commissions. To remain profitable, hotels reportedly raise room prices to recover those costs. The complaint also asserts that Expedia forbids certain hotels from offering lower rates on their own direct websites. The company also allegedly penalizes hotels that post lower rates on rival online travel agencies like Booking.com or Priceline by demoting them in search results.

As a result, and due to the challenged conduct, hotels must artificially inflate the prices in the direct-booked channel even though it is less expensive to sell through that channel, the consumers state in the court filing. The legal action identifies several major hotel chains affected by the practices, including Marriott International, Hilton Worldwide, InterContinental, Wyndham, Hyatt, and Best Western.

Alleged Degradation of Service Quality and Legal Claims

Beyond pricing impacts, the lawsuit claims that Expedia’s market dominance has degraded online travel agency service quality across the entire industry. The plaintiffs argue that a lack of competitive pressure allows Expedia to maintain opaque fees, restrictive refund and cancellation policies, and unresponsive customer service without facing normal market consequences.

The consumers allege that Expedia violates both the Sherman Act and the Clayton Act, federal laws restricting anticompetitive business conduct. The lawsuit asks the federal court to rule that Expedia violated these antitrust laws and to issue an injunction blocking the company from continuing its current pricing scheme.

Jury Trial Request and Pending Response from Expedia

The plaintiffs requested a jury trial in Seattle to resolve the dispute. Expedia did not respond to a request for comment prior to publication deadlines.