Hotel Comparison site Trivago is under fire after the Federal Court of Australia ruled that the website misled consumers into believing they were seeing the cheapest hotel prices available.
Meanwhile, Australia’s consumer watchdog, the ACCC is warning of an even larger crackdown on other comparison websites for using misleading tactics to gain customers.
Trivago claimed that its website allowed customers to find the cheapest hotel rates available by comparing other booking sites like Expedia, Hotels.com and Booking.com.
The reality was, Trivago was simply prioritising the advertisers who were willing to pay the highest cost-per-click fee while tricking customers into believing they were being shown the best prices.
One way of achieving this deception was that they were not comparing like with like, but rather compared a luxury room price to a standard room price.
During the case against Trivago, Justice Mark Moshinsky ruled that the website “engaged in conduct that was misleading and deceptive or likely to mislead or deceive”.
Trivago’s penalty is yet to be decided but it could be in the ballpark of millions of dollars.
The ACCC first cracked down on Trivago in August 2018 over the site’s misleading TV commercials.
“Many consumers may have been tricked by these price displays into thinking they were getting great discounts.”
ACCC’s Chair Rod Sims
He went on to say that the court’s finding sent 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.
We will be sure to update you when Trivago’s penalty is handed down later this year.
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