Algorithmic Pricing: Four Questions for Your Vendor

This post is informational and reflects the state of the law as of August 2026. For your situation, consult a licensed attorney.

A company that follows an AI pricing algorithm’s recommendation ninety percent of the time may end up explaining that compliance rate to a jury.

On July 29, 2026, the Third Circuit reversed the dismissal of a price-fixing class action in Cornish-Adebiyi v. Caesars Entertainment, Inc., No. 24-3006 (3d Cir. July 29, 2026). The defendants are Atlantic City casino-hotels and Cendyn Group, the vendor behind the Rainmaker pricing platform they share.

What the plaintiffs alleged, and why it survived

The allegation is that the hotels fed real-time, non-public room pricing and occupancy data into Rainmaker, received rate recommendations calculated in part from competitors’ data, and charged those rates about ninety percent of the time. The district court had dismissed, reasoning that plaintiffs pleaded no “rim” to the wheel: no agreement among the hotels themselves. The Third Circuit disagreed and held the allegations sufficient to support a finding that the hotels conspired to fix prices through Cendyn’s software.

Two allegations did much of the work. Cendyn is alleged to have required a special override, to be used only in times of “need and extreme circumstances,” and to have scored each hotel on how often it overrode the recommendation. The court also declined to make plaintiffs explain the algorithm’s mechanics before discovery, which means a complaint of this shape can reach depositions without first proving how the software works.

The panel framed the principle through a question posed by former FTC Acting Chair Maureen Ohlhausen:

“Is it ok for a guy named Bob to collect confidential price strategy information from all the participants in a market, and then tell everybody how they should price? If it isn’t ok for a guy named Bob to do it, then it probably isn’t ok for an algorithm to do it either.”

The distinction that decides these cases

This is a pleading-stage ruling, not a finding that anyone fixed prices. Read against the Ninth Circuit’s affirmance of dismissal on the same software in Gibson v. Cendyn Group, LLC, 148 F.4th 1069 (9th Cir. 2025), cert. denied (U.S. Apr. 20, 2026), the two outcomes turn on a single fact: whether the software pooled competitors’ non-public data. In Gibson, plaintiffs never alleged that Cendyn shared one hotel’s data with another.

That is the line worth watching. It is not about whether a vendor uses AI, or whether pricing moves in parallel. It is about whose data goes into the model.

Legislatures are moving faster than the courts here. California amended the Cartwright Act, effective January 1, to reach shared pricing algorithms across industries using competitor data whether public or not, and to lower the pleading bar for conspiracy claims.

Four questions for your revenue-management vendor

If you buy pricing software, the answers to these belong in your file before a plaintiff asks for them:

Does the model use any other customer’s non-public data?
Does overriding a recommendation require elevated permissions?
Does the vendor track how often you override it?
Does the vendor market the tool by promising the higher prices that pooled data would produce?

If you build pricing software rather than buy it, ask yourself the same four, because the marketing question is the one that tends to age worst.

Antitrust law protects independent decision-making. A high compliance rate with a shared algorithm is evidence that a company handed that independence to someone else.

If your business prices with software that sees competitors’ data, talk to MB Legal about what your vendor agreement and your override practices look like on the record. See also the firm’s AI and emerging technology and technology transactions practices.

This post is informational and does not constitute legal advice. The decision discussed is a pleading-stage ruling; the allegations described have not been proven. For guidance on a specific situation, consult a licensed attorney.