The Australian Competition and Consumer Commission (ACCC) alleges that travel comparison website Trivago misled the public over hotel pricing, contravening Australian Consumer Law.
Taking its claims to Federal Court, the ACCC says that from at least December 2013, Trivago ran advertisements that presented its website as an objective price comparison tool for consumers looking for the best bargain, when it instead prioritised its highest paying advertisers.
According to the ACCC, the website would aggregate deals offered by online travel sites (like Expedia and Hotels.com) but highlight just one price from their advertisers.
It was this practice, the ACCC alleges, that created a false impression for customers looking for the best deal at a 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. Trivago based its rankings on the highest cost per click it would receive from its advertisers,” ACCC Chair Rod Sims said.
“We allege that because of the design of Trivago’s website and representations made, consumers were denied a genuine choice about choosing a hotel deal, by making choices based on this misleading impression created by the Trivago website.”
The ACCC claims Trivago’s online strike-through comparisons were also contrasting offers for standard rooms alongside higher category rooms at the same property.
“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. Further, hotels may have lost potential business as a result of this alleged conduct,” Mr Sims said.
In a probe, the ACCC found consumers “overwhelmingly” clicked on the most prominently displayed offers for each hotel.
“This case highlights growing concerns the ACCC has in relation to comparison platforms, and on how algorithms present search results to consumers,” Mr Sims said.
“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.
“Businesses must ensure the nature of search results, such as if they are sponsored or paid for, is made clear to consumers or they risk contravening the Australian Consumer Law.”
Subscription successful! Thank you for subscribing.