Chances are that you’ve heard or may have even booked your holiday through the hotel booking website known as Trivago. If you’ve ever browsed the Trivago website, it may come as a shock to you that the ‘best deals’, usually shown at the top of the results list, were not actually the cheapest or best offer available to you. In fact, there was a hidden agenda at play.
The new year kicked off with the case of ACCC v Trivago N.V, which provides a shocking example of misleading and deceptive conduct practices where profit is placed ahead of customer’s interests.
This is an area where the Australian Competition and Consumer Commission (ACCC) is currently focussing it’s efforts and looking to enforce honest and transparent conduct. Federal Court Justice Moshinsky found that Trivago was guilty of engaging in conduct that was misleading and deceptive or was likely to mislead or deceive from at least December 2016 and had breached the Australian Consumer Law.
Trivago had aired TV ads over a few years which suggested that its website was a fair and impartial price comparison hotel booking service. However, in reality, it was said that Trivago’s website had utilised an algorithm that prioritised hotel companies who paid Trivago the highest ‘cost-per-click fee’. ACCC Chair Rod Sims stated that “Trivago’s hotel room rate rankings were based primarily on which online hotel booking sites were willing to pay Trivago the most”.
Allegedly, Trivago’s website would compile and list deals offered by other travel booking sites or the hotels directly and it would ‘highlight’ the cheapest or best value booking. The ACCC claimed that this created an illusion of promoting the best deals when, in reality, the cheapest or the best value highlighted price was often more expensive or not actually the ‘best value’ available when compared with other hotel room offerings. Trivago would ‘strike through’ a hotel price which tricked consumers into thinking they were saving money, when often the results comparison shown to consumers “wasn’t comparing apples with apples when it came to room type for these room rate comparisons” statedACCC Chair Mr Rod Sims.
The Federal Court sided with the ACCC and found that the methods that Trivago used in displaying prices and its best deals gave consumers a false impression of savings.
ACCC Chair Mr Rod Sims observed that the ACCC considered Trivago’s conduct was “particularly egregious”.
The Federal Court will set down the penalties it will impose on Trivago for their breaches of the Australian Consumer Law at a later date.
For now, this decision should serve as a reminder to other booking services and comparison websites to be clear with consumers if the ranking or ordering of the results are influenced by profit or advertising. The ACCC is pushing for honest and transparent conduct when businesses deal with their consumers, particularly with displaying compared search results.
If you are uncertain as to whether this decision may affect your business or products offered to consumers, then please get in touch with our Litigation + Dispute Resolution and Commercial + Property Teams.
You can read Moshinsksy J’s Judgement here: Australian Competition and Consumer Commission v Trivago N.V.  FCA 16