Washington, D.C. —  Today, the Third Circuit Court of Appeals reversed a lower court dismissal and revived a landmark antitrust case alleging that Atlantic City casino-hotels and pricing software company Cendyn used an algorithmic pricing program called “Rainmaker” to coordinate room prices and inflate costs for consumers. In response, Economic Liberties released the following statement: 

“This is a warning shot against the market-rigging tech fanning the flames of America’s affordability crisis. Big businesses want us to think they can use price-hiking algorithms to enact cartel behavior that would otherwise be illegal if accomplished by executive handshakes in a boardroom. Today’s ruling is a sharp rebuke of such brazen lawlessness,” said Katherine Van Dyck, Senior Fellow at American Economic Liberties Project. “Artificial intelligence and fancy algorithms aren’t a backdoor to get away with criminal activity. The law is clear: price fixing is price fixing, whether it happens in a smoke-filled room or in a line of code. Companies cannot use technology as a ‘Get Out of Jail Free’ card to collude and charge artificially high prices to customers.”

“This decision is an important step toward bringing antitrust enforcement into the digital age,” Van Dyck added. “Technology should help businesses compete, not give dominant companies a new way to coerce small businesses and working Americans into paying more.”

The lawsuit, brought by casino-hotel guests, alleges that major Atlantic City casinos — including Caesars, MGM, Hard Rock, Tropicana, and Borgata — shared real-time, non-public pricing and occupancy data with Cendyn’s Rainmaker software. The algorithm allegedly used competitors’ confidential information to generate recommended room rates that participating casinos adopted roughly 90% of the time, allowing them to maintain higher prices in a market that would normally push prices down. 

The court held that when competitors’ prices remain elevated under market conditions that would normally push prices down, that pattern itself can support an inference of illegal coordination, even without direct evidence of an agreement. And it stated unequivocally that “AI software can facilitate collusion by enabling competitors to coordinate prices and share information without ever communicating with each other.” 

The case will now return to the District Court for further proceedings, where plaintiffs will have the opportunity to develop evidence supporting their claims.

From housing to travel to retail, companies are deploying automated pricing tools that can transform how markets operate and create new opportunities for coordination among competitors. The ruling comes amid a growing wave of enforcement against algorithmic pricing tools. In 2024, the DOJ and FTC released a joint legal brief saying price fixing by algorithm is still pricing. That same year the DOJ filed a suit against RealPage, the algorithmic price fixing firm accused of coordinating rental prices across landlords. A settlement was entered in 2025 under the Trump administration’s DOJ. 

These practices are already illegal under existing antitrust law. But some courts have wavered on how to apply traditional antitrust principals to algorithmic conduct. Last year, California passed the Preventing Algorithmic Price Fixing Act (AB 325) to clarify that algorithmic collusion violates state law. California gas stations allegedly using Kalibrate software to coordinate prices have already been sued under this new law.

Listen to Van Dyck’s thoughts on legislating and litigating against algorithmic collusion here.

Learn more about Economic Liberties here.