News

Trivago loses appeal in ACCC case

Hotel comparison website Trivago has lost its appeal in the Full Federal Court. The appeal was launched following a January verdict which found Trivago had breached the Australian Consumer Law by making misleading representations about hotel room rates on its website and television advertising.

The judge at first instance had found that Trivago did not sufficiently disclose to users that its website used an algorithm that gave prominence to accommodation providers paying Trivago a higher payment fee (cost per click), meaning that the most prominent offers were often not the cheapest offers for consumers.

The primary judge also found that Trivago misled consumers through the use of strike through prices and text in different colours because Trivago often compared the rate for a standard room with the rate for a luxury room at the same hotel.

Today’s decision by the Full Federal Court upholds 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,” Australian Competition and Consumer Commission (ACCC) chair Rod Sims said.

“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.”

An example of the misleading TV ads, claiming Trivago identified hotel rooms at the ‘best price’

The matter will now return to the primary judge, who will consider the orders sought by the ACCC against Trivago at a later date. The ACCC is seeking orders for declarations, injunctions, penalties and costs.

From at least December 2016, the Netherlands-incorporated platform used the algorithm which did not highlight the cheapest rates 66.8% of the time,  and instead favourably ranked hotels that paid the platform the highest cost-per-click fee.

In August 2018 the ACCC instituted proceedings against Trivago and in January 2020, the Federal Court found Trivago had breached the Australian Consumer Law when it made misleading representations about hotel room rates on its website and television advertising.

Trivago launched the appeal in March.

ADVERTISEMENT

Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.

 

SUBSCRIBE

Sign up to our free daily update to get the latest in media and marketing.