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Trivago Loses ACCC Appeal Over Misleading Hotel Ads

Online hotel comparison service, Trivago, has lost its appeal to the ACCC over allegations of misleading advertisements related to room rates.

Back in January, the consumer watchdog ruled that Trivago had breached Australian Consumer Law by presenting that its website would help consumers identify the cheapest rates for a given hotel.

A judge deemed that Trivago did not sufficiently disclose to consumers that its website used an algorithm which gave prominence to accommodation providers based on their payment bfee (cost per click).

The result was that the most prominent offers were not the cheapest offers for consumers.

Trivago’s revenue was found to be primarily obtained from cost-per-click payments from hotel booking sites, thereby significantly affecting prominence in search results.

The primary judge also ruled that Trivago misled consumers with different coloured text and strike through pricing, often comparing the rate for a standard room with a  luxury room within the same hotel.

The Federal Court has upheld the primary judge’s decision that Trivago’s website representations misled consumers.

“This is a win for consumers and is an important warning to comparison sites that they must not mislead consumers about the results they recommend,” states ACCC Chair Rod Sims.

“We brought this case because we were concerned that consumers were being misled by Trivago’s claims that their site was getting the best deal for consumers, when in fact they were shown the deals that benefited Trivago”

“Trivago’s conduct meant that consumers may have paid more for a room at a hotel than they should have, and hotels lost business from direct bookings despite offering a cheaper prices.”

 

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