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Seattle Class Action Accuses Major Airlines of Using AI to Share Private Fare Data and Inflate Ticket Prices
A proposed class action filed in Seattle federal court alleges seven major airlines and a fare-data clearinghouse used AI-driven tools to exchange nonpublic pricing information, suppressing competition and driving up ticket costs for travelers.
A proposed class action filed Wednesday in federal district court in Seattle accuses seven of the nation's largest airlines and a Virginia-based fare-data clearinghouse of violating federal antitrust laws by sharing nonpublic pricing information and using artificial intelligence to monitor competitors' fares in real time, allegedly suppressing competition and inflating ticket prices.
The lawsuit names Delta, United, American, Alaska, Hawaiian, Southwest and JetBlue as defendants, along with the Airline Tariff Publishing Company, known as ATPCO, and its subsidiary 3Victors. The complaint was filed on behalf of two travelers, Ashley Ward of California and Gregory Morris of New Jersey, who allege they paid artificially inflated fares as a result of the airlines' conduct.
At the center of the case is ATPCO, a Herndon, Va.-based company that describes itself on its website as "owned by the airlines" and lists several major carriers on its board of directors. For decades, airlines have shared public fare data through the clearinghouse. But the lawsuit alleges that beginning in 2023, ATPCO rolled out a data repository that allowed airlines to view competitors' nonpublic, individualized discount offers in exchange for sharing their own data, paired with a monitoring tool from 3Victors that would alert carriers when a rival cut prices on a competing ticket.
Steve Berman, an attorney with the Seattle-based Hagens Berman law firm, which filed the litigation, said participating airlines can see "in real time what everyone is charging for any route in the U.S."
"They're basically eliminating independent competition," Berman said in an interview.
According to the complaint, ATPCO launched a working group in 2016 to study "dynamic pricing" â the practice of offering nonpublic discounts tailored to specific travelers â and worried that such personalized offers, which could go undetected by competitors, would disrupt the industry's traditional order. Under the longstanding model of publicly shared fare data, carriers had little incentive to offer deep discounts because rivals could simply match the price, the lawsuit notes.
By 2023, ATPCO and 3Victors had rolled out tools to track dynamic pricing and make it available alongside other fare data, setting up the repository as a "give to get model" in which airlines that shared their information could access competitors' data "in proportion to what it contributes," according to the complaint. Airlines using the platform had access to more market information than a competitor or the general public could obtain by watching the market, the lawsuit alleges.
The filing argues that the practice conflicts with 1994 consent decrees stemming from a Department of Justice lawsuit against ATPCO and eight major airlines. Those decrees, which all expired by 2011, barred airlines from sharing nonpublic information to control pricing and essentially limited them to gathering only the competitive data a travel agent selling a ticket could also access.
"By building a system of private data that shows each airline when a rival has gone lower, the defendants have successfully rebuilt what the government dismantled thirty years ago," the travelers' attorneys wrote in the complaint.
American Airlines denied the claims. "We operate in a highly competitive industry that has delivered tremendous value to consumers, and we take compliance with antitrust laws very seriously," a spokesperson said in a statement. "We develop and price our products independently, compete every day to win customers and categorically reject any suggestion that our prices are anything other than independent and competitive."
Most of the other airlines either declined to comment on pending litigation or could not be reached. ATPCO could not be reached for comment. On its website, the company bills its services as a way for airlines to "get the right offer to the right customer at the right time" and does not publicly list its customers.
The proposed class seeks to represent passengers who purchased domestic tickets from Southwest, Alaska, JetBlue or United in the past four years. The lawsuit alleges Delta and Hawaiian are connected to ATPCO and the company board that approved the data-sharing repository. Berman said he expects to amend the complaint to include Delta ticket holders in the future.
The litigation comes as ticket prices are soaring, which airlines have attributed to skyrocketing jet fuel prices amid the Iran war. Over the past year, airline executives have said those high ticket prices are likely here to stay as carriers work to recover from a costly year and increasingly cater to passengers willing to pay more for premium experiences.