Top Hotels Accused of Manipulating Search Results

CHICAGO (CN) – A class of guests claims six hotel chains entered into an illegal and anticompetitive agreement to eliminate competing hotels from search engine results and freeze out online travel agencies like Priceline and Expedia.

On Monday, lead plaintiff Karen Tichy of Clarksville, Virginia, sued six hotel companies, asking a federal judge in Chicago to put a stop to a practice that she alleges restrains competition and hurts consumers.

Tichy estimates that the scheme to eliminate competitors from search results damages millions of hotel shoppers and costs them billions of dollars each year. She is represented by lead attorney Steve Berman of Hagens Berman in Seattle.

The hotel chains include Choice Hotels, Hilton, Hyatt, InterContinental, Marriott and Wyndham. They own and control some of the most recognizable hotel and motel brands in the country, including Comfort Inn, Hampton Inn, DoubleTree, Park Hyatt, Holiday Inn and Travelodge.

Tichy says that she booked hotel rooms on Google several times in the last three years and noticed that when she looked for Marriott hotels, her search would return results that eliminated competing brands.

Eventually, she began to book rooms through the Marriott website and claims she paid more for hotel rooms because more competitive pricing was not made available to her.

The class-action lawsuit alleges the hotels reached an agreement in 2015 not to compete with each other for consumers shopping for hotel rooms online, creating an illegal scheme that prevents online travel agencies such as Priceline and Expedia from bidding on their branded keywords.

A search using the keyword “Hilton,” for example, would not return results for Hyatt and vice versa, according to Tichy.

“The effect of these agreements was to impair competition, resulting in direct harm to consumers in interfering with the free flow of information from sellers to buyers, raising the costs to consumers of finding the most suitable offering, increasing transaction prices, and raising the price of hotel rooms sold online by reducing the downward pricing pressure exerted by [online travel agencies] and each other,” the lawsuit states.

Tichy’s lawyer, Berman, was not available for an interview on Tuesday, but he accused the hotel chains of deceptive advertising in a prepared statement.

“Instead of honest competition, these hotel chains chose to cheat the system and deceive their customers,” Berman said.

The complaint estimates that the practice involves 60 percent of hotel inventory and affects all consumers who booked hotels from 2015 to 2017.

Tichy alleges that the chains entered into group boycott and bid-rigging agreements and unreasonably restrained trade. The proposed class of consumers seeks damages, costs and an injunction.

Hyatt spokeswoman Stephanie Lerdall and Hilton spokeswoman Meg Ryan said they could not comment on pending litigation.

Marriott spokesman Jeff Flaherty said the company is reviewing the complaint and could not comment further. The other chains did not immediately respond to requests for comment Tuesday morning.

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