Trivago Mislead Consumers On Hotel Pricing: Federal Court
The Federal Court has found travel website Trivago to have mislead consumers about cheap hotel deals on its website and on television advertising, breaching Australian Consumer Law.
The European company didn’t display the cheapest deals to customers for hotel rooms but instead promoted deals by advertisers who paid the highest fees.
‘Contrary to the impression created by the relevant conduct, the Trivago website did not provide an impartial, objective and transparent price comparison service,’ the federal court justice Mark Moshinsky said on Monday, according to The Guardian.
‘The fact that Trivago was being paid by the online booking sites was not made clear,’ he said in his judgment.
The Court ruled that from December 2016, Trivago mislead consumers by claiming its website would conveniently deliver users the cheapest rates available in any given hotel.
However, the company instead used an algorithm that prioritised hotel booking sites that paid Trivago the highest cost-per-click fee when determining the website rankings and often failed to highlight the cheapest rates for consumers.
‘Trivago’s hotel room rate rankings were based primarily on which online hotel booking sites were willing to pay Trivago the most,’ ACCC Chair Rod Sims said.
‘By prominently displaying a hotel offer in “top position” on its website, Trivago represented that the offer was either the cheapest available offer or had some other extra feature that made it the best offer when this was often not the case.’
The company was also found guilty of false and misleading price comparisons for comparing standard room rates with luxury rooms at the same hotel, thereby creating a false sense of savings in consumers looking for a good deal.
‘We brought this case because we consider that Trivago’s conduct was particularly egregious. Many consumers may have been tricked by these price displays into thinking they were getting great discounts. In fact, Trivago wasn’t comparing apples with apples when it came to room type for these room rate comparisons,’ Mr Sims said.
Finally, the Court also found that Trivago mislead consumers to believe their website provided impartial, objective and transparent price comparisons for hotel room rates until at least 2 July 2018.
‘This decision sends a strong message to comparison websites and search engines that if ranking or ordering of results is based or influenced by advertising, they should be upfront and clear with consumers about this so that consumers are not misled,’ Mr Sims said.
Trivago’s misleading advertising was found to have aired more than 400,000 times between late 2013 until mid-2018.
A hearing on penalties and relief is due for the Federal Court at a later date.