Travelocity and Sabre Win Motion to Dismiss Antitrust Class Action Case

Cleary Gottlieb won dismissal of an antitrust class action involving online pricing of hotel rooms brought against clients Travelocity and its parent Sabre Holdings, among other online travel agencies and hotels. The U.S. District Court for the Northern District of Texas dismissed without prejudice the plaintiffs federal and state conspiracy and consumer protection claims in its ruling on February 18, 2014.

The plaintiffs alleged a conspiracy amongst hotels and online travel agencies to impose “rate parity” across hotel booking websites so that the price of a room is the same on a hotel chain’s website as it is on any of the other websites where it may also be sold. Noting that the defendants had motivations to pursue rate parity independent of a conspiracy, and discounting the “plus” factors alleged by the plaintiffs – rigorous enforcement of the rate parity provisions, attendance at trade association meetings, an investigation of the issue by European regulators, and market power – the Court found that the plaintiffs had not plausibly alleged a conspiracy in violation of the antitrust laws. The Court also dismissed state law consumer protection claims on the basis that even if “low price guarantees” might be deceptive, no harm to consumers resulted.