An Australian court has ruled that Trivago, misled customers in advertisements by claiming its website showed the best hotel prices. In fact, it displayed deals that generated the highest commissions for the travel comparison site.
Trivago breached Australia’s consumer law when it made misleading representations about hotel room rates in both its website and television advertising in 2018, Australian Competition and Consumer Commission (ACCC) Chairman Rod Sims said on Tuesday.
“Trivago makes its money by the commissions paid by those advertising on its website,” Sims said.
“They prioritise those people who pay the largest commission on their website. Therefore, the consumers are getting directed to advertisers which most benefit Trivago rather than advertisers which most benefit consumers.”
Australia’s consumer watchdog sued the Frankfurt-listed company in August over claims it misled customers. on Monday, saying pecuniary penalties would be set at a future hearing.
Federal Judge Mark Moshinsky ruled against the company finding that Europe based Trivago failed to display the cheapest offers for hotel rooms, contrary to its claims.
“The fact that Trivago was being paid by the online booking sites was not made clear.” Said Moshinsky.
The Australian Competition and Consumer Commission now wants Trivago to be punished with a fine ‘in the millions’ of dollars.
“We want these to be penalties that the company sits up and takes notice of.” Said Sims.
“This decision sends 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
…and then Trivago said…
Trivago head of communications Stephanie Lowenthal said the company would review the court’s ruling, which according to the company provided “new guidance” on how comparison website results should be displayed in Australia.
“We are working to quickly understand the implications of this decision on our website design and its overall impact on the Australian travel industry and the way websites are to be designed in Australia,” Lowenthal said.
Surely this is the most disingenuous (and ridiculous) take on the ruling. The “implications” of the “website design” in Australia? What has that got to do with anything?
Trivago advertised that Australian customers would see the lowest prices and in fact they did not do so – instead directing customers to the most favourable financial deals for the company. That’s not web design in Australia that’s adding to your own bottom line.