Priceline is etitled to the cancelation fee for canceling the reservation, but most hotels, if not all hotels, only charge the first nights' stay price for the cancelation not the full amount for the full reservation. To keep the full cost of the reservation may not be illegal, but it is unethical and puts Priceline into a category of one of those businesses that do business on the edge. And as for me, I would never do business with a shaddy business like this.
Until we as consumers start avoiding businesses like this, companies will contiue to rip us off so I recommend that we all start passing on information like this about companies like this to our Attorney Generals for each state and our friends and neighbors.