Agency Alleges that Association Intended to Increase Motel Room Rates in South Lake Tahoe
South Lake Tahoe Lodging Association ("SLTLA") has agreed to settle Federal Trade Commission charges that it violated antitrust laws when its members agreed to stop posting price signs for motel rooms in the South Lake Tahoe area of Northern California and Nevada. According to the FTC, the primary purpose of SLTLA's agreement was to increase the room rates for lodging in the area and to end what members saw as a "destructive" price war on motel rooms in South Lake Tahoe by eliminating the posting of signs advertising the prices for such lodging. The agreement, which was announced today for public comment, would bar SLTLA from agreeing to eliminate the posting of signs advertising its members' prices.
SLTLA -- a nonprofit corporation -- is a trade association representing the interests of the majority of motel and hotel operators and other operators of lodging properties on the California side of the South Lake Tahoe area. It has approximately 63 members who constitute approximately 70 percent of the available lodging units in the South Lake Tahoe area, the FTC said.
According to the FTC's complaint outlining the charges, SLTLA's members have conspired among themselves to eliminate the posting of signs advertising the prices for lodging in the South Lake Tahoe area. The effects of the agreement, the complaint charges, are that price competition among providers of lodging in the area has been reduced and consumers have been deprived of the benefits of truthful information concerning the prices of motel and hotel rates in the South Lake Tahoe area.
In order to settle the charges, SLTLA has agreed to stop participating in any agreement to restrict the posting of signs advertising the prices at which its individual members offer lodging.
The Commission vote to accept the proposed consent agreement was 4-0. The FTC's San Francisco Regional Office handled this matter.
An announcement regarding the proposed consent agreement will be published in the Federal Register shortly. The agreement will be subject to public comment for 60 days, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.
NOTE: A consent agreement is for settlement purposes only and does not constitute an admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of $11,000.
Copies of the complaint, proposed consent order and an analysis to aid public comment are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. Consent agreements for public comment also are available by calling 202-326-3627. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
(FTC File No. 9710110)
Office of Public Affairs
Bureau of Competition
Jeffery A. Klurfeld
San Francisco Regional Office
901 Market Street, Suite 570
San Francisco, CA 94103