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Trivago Hit With $44.7 Million Fine For Misleading Claims

The Federal Court has issued Trivago with a whopping $44.7 million fine for making misleading claims about room rates on its website and TV advertising.

In January 2020, the Federal Court found the popular hotel comparison site had broken Australian Consumer Law by claiming its website “would quickly and easily help users identify the best deal or cheapest rates available for a given hotel.”

In reality, an algorithm was favouring whichever hotel booking site paid Trivago the highest click-through fee.

“One of the ACCC’s key priorities is to hold online businesses accountable for their representations to consumers and to ensure consumers are fully aware of the way these supposedly free services actually work and what influences the prices they display,” ACCC Chair Gina Cass-Gottlieb said.

“The way Trivago displayed its recommendations when consumers were searching for a hotel room, meant consumers were misled into thinking they were getting a great hotel deal when that was not the case.”

“Trivago also mislead consumers by using strike-through prices which gave them the false impression that Trivago’s rates represented a saving when in fact they often compared a standard room with a luxury room at the same hotel.”

Trivago admitted to earning approximately $58 million in cost-per-click fees from offers that were not the cheapest available offer for a given hotel. Between December 2016 and September 2019 consumers overpaid hotel booking sites approximately $38 million through this scheme.

“Trivago’s conduct took advantage of consumers’ desire to find the best deal, and the Court’s decision to order such a significant penalty reflects the seriousness of Trviago’s conduct.

“This penalty sends a strong message not just to Trivago, but to other comparison websites, that they must not mislead consumers when making recommendations.”

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