Third Circuit Revives Pricing Algorithm Collusion Claims Against Casino Hotel Owners

Since the first case alleging "collusion by algorithm" was filed in October 2022, see Compl., Bason, et al. v. RealPage, Inc., No. 3:22-cv-01611 (S.D. Cal. Oct. 18, 2022) (ECF No. 1), courts have grappled with the facts plaintiffs must plead in a complaint to plausibly allege that an agreement to use pricing software in making pricing decisions violates Section 1 of the Sherman Act. An emerging consensus among courts appears to be that, if plaintiffs allege competitors contributed non-public, competitively sensitive information to the software company, which pooled the data for use by an algorithm in making pricing recommendations, then plaintiffs' claims of an agreement among the users of the pricing software could survive a motion to dismiss. However, if plaintiffs did not or could not allege that pricing recommendations were based on pooled, competitively sensitive information, then claims of a "horizontal" agreement between competitors using the pricing software would be dismissed.