Online travel booking company Trivago has been ordered to pay $44.7 million in penalties by the Australian Federal Court for misleading consumers over hotel prices.
The court found that in January 2020, the company deceived consumers through misleading misrepresentations of hotel room rates on its website and in television advertisements.
Trivago had used an algorithm to determine which travel booking site paid the highest cost-per-click fee and highlighted them on its website.
Between December 2016 and September 2019, the company admitted to receiving $58 million in cost-per-click fees from offers that weren’t the cheapest choice available for a given hotel. This had caused consumers to overpay on hotel booking sites, losing out on almost $38 million dollars.
Australian Competition and Consumer Commission (ACCC) chair Gina Cass-Gottlieb said this penalty sends a strong message not just to Trivago, but to other comparison websites.
“The way Trivago displayed its recommendations when consumers were searching for a hotel room, meant consumers were misled into thinking they were getting a great hotel deal when that was not the case.
“Trivago also misleads consumers by using strike-through prices which gave them the false impression that Trivago’s rates represented a saving when in fact they often compared a standard room with a luxury room at the same hotel,” she said.
Accommodation Association CEO Richard Munro welcomed the decision of the Federal Court and added: “After surviving Covid and closed borders, the harsh reality is that many of our members rely on a portion of their bookings generated through these platforms, and can find themselves stuck between a rock and a hard place.”
He further encouraged Australian travellers to book directly with local accommodation providers or through local travel agents.