ACCC Cracks Down On Trivago For Biased Hotel Prices
The ACCC has instituted proceedings in the Federal Court against Trivago, alleging the online hotel booking company misled consumers, by prioritising certain vendors on their website and TV ads.
From at least December 2013, the ACCC claims Trivago’s TV ads presented an impartial and objective price comparison tool, despite favouring advertisers who paid the highest cost per click fee.
As a part of Trivago’s aggregated search results, users were shown a list of available hotel rooms, with one highlighted result implying the best hotel deal available.
Trivago ran its TV advertisements over 400,000 times between 2013 and April 2018.
ACCC Chair Rod Sims claims “consumers may have formed the incorrect impression that Trivago’s highlighted deals were the best price they could get at a particular hotel, when that was not the case.”
“Trivago based its rankings on the highest cost per click it would receive from advertisers”
“We allege that because of the design of Trivago’s website and representations made, consumers were denied a genuine choice about choosing a hotel deal, by making choices based on this misleading impression created by the Trivago website.”
The ACCC claims strike through price comparisons were also misleading by ranking incomparable rooms – e.g. a standard room against a luxury room, creating a false savings impression on the standard offer.
“We also allege that by not making genuine room price comparisons, consumers would likely have paid more than they otherwise would have for the same hotel,” says Sims.
“Further, hotels may have lost potential business as a result of this alleged conduct.”
Trivago as spoken with Channel News, responding to the allegations, commenting: “[w]e agree with the ACCC’s earlier public statement that “comparator websites can assist consumers to make more informed purchasing decisions when comparing what are often quite complex products, and can promote healthy competition by assisting small or new service providers to compete more effectively.”
“We are disappointed by the action the ACCC has chosen to take in relation to trivago and will vigorously defend our interests.”