Latest Collusion-By-Algorithm Ruling Offers More Of Same, But A Significant New Twist

Starting in October 2022, companies that use software to assist in setting prices for their products have faced an avalanche of litigation claiming that the common use by competitors of the same pricing software inflates prices and amounts to "collusion by algorithm" in violation of Section 1 of the Sherman Act. Class action plaintiffs have targeted owners and developers of multifamily apartments, along with luxury, extended-stay and casino hotels and health insurers, among others, in antitrust lawsuits in courts around the country. The plaintiffs' theory – that the adoption and use of the same pricing platform is the product of collusion among users of the software – has been tested on motions to dismiss in several cases, with what appears to be an emerging consensus among courts that allegations that users of the software knowingly contribute competitively sensitive information to the algorithm for use in setting prices for all users can state a claim and survive