Hotel comparison website Trivago has failed to overturn a court ruling it misled consumers by pushing deals that gave it higher fees rather than the best offers for guests.
The Federal Court ruled against Trivago in January in an action brought by the Australian Competition and Consumer Commission, and the full bench of the same court dismissed the company’s appeal on Wednesday.
While Trivago claimed its website would quickly and easily help users identify the cheapest rates available for a given hotel, it did not sufficiently disclose an algorithm that gave prominence to accommodation providers that paid a higher fee to the company, the initial judge found.
It meant the most prominent offers were often not the cheapest.
Trivago’s misleading TV advertisement from 2017.Source:News Regional Media
The primary judge also found Trivago misled consumers through the use of strike-through prices and text in different colours that often compared the rate for a standard room with the rate for a luxury room at the same hotel.
“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,” ACCC chair Rod Sims said.
“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 cheaper prices.”
The ACCC said Trivago’s own data showed higher-priced room rates were selected as the top offer over alternative lower-priced offers in 66.8 per cent of listings.
The matter will now return to the primary judge to consider penalties.
The maximum penalty for breaching Australian Consumer Law through misleading representations is $10 million per breach.
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