Several recent court cases contend that the pricing algorithms used by hotels and multifamily landlords pose antitrust risks. Federal regulators have intervened to argue that these systems can lead to unintended collusion and antitrust violations, even without explicit agreements among the parties. Businesses can reduce the risk of collusion with algorithms that rely on decentralized ' as opposed to centralized ' decision-making and use only public, not private, data. For decades, hotels, airlines, casinos, and other companies have used revenue management systems to help them set prices, maximize revenues, and gain competitive advantage. Now, in a series of legal cases, plaintiffs have argued that some of those systems' pricing algorithms could be used to facilitate illegal price-fixing in violation of federal antitrust law. Typically, collusion over pricing requires explicit coordination among competitors, the kind one might imagine occurring in the stereotypical smoke-filled room....
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