Australia’s watchdog has taken online hotel comparison site, Trivago, to Federal Court over allegations of misleading hotel pricing representations.
The Australian Competition & Consumer Commission (ACCC) alleges that from at least December 2013, Trivago ran TV ads presenting itself as an impartial and objective price comparison service, when its website was allegedly prioritising advertisers who were paying the highest cost per click fee to Trivago.
In an online release, the Aussie watchdog explained that the site highlights one price out of all their aggregated deals, which the ACCC believes created an impression of it being the best deal. However, apparently, in many cases, the highlighted price was not the cheapest available at that hotel.
“Based on Trivago’s highlighted price display on its website, we allege that consumers may have formed the incorrect impression that Trivago’s highlighted deals were the best price they could get at a particular hotel, when that was not the case.”
Rod Sims, ACCC Chair
“Trivago based its rankings on the highest cost per click it would receive from its advertisers.”
Sims continued, saying that the ACCC alleges that the design of the website denied consumers of a genuine choice, but instead left them making “making choices based on this misleading impression created by the Trivago website”.
The ACCC also alleges that Trivago’s online strike-through price comparisons were false or misleading because they often compared an offer for a standard room with an offer for a luxury room at the same hotel, creating a false impression of savings offered for the standard room.
“We also allege that by not making genuine room price comparisons, consumers would likely have paid more than they otherwise would have for the same hotel.”
The ACCC investigation uncovered data that shows consumers who visited Trivago’s website overwhelmingly clicked on the most prominently displayed offers for each hotel.
“We are very concerned that such platforms convey an impression that their services are designed to benefit consumers, when in fact listings are based on which supplier pays the most to the platform,” Sims added.
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