In the same month that the Australian Competition and Consumer Commission fined Meriton $3 million for manipulating reviews on TripAdvisor, the ACCC has instituted proceedings in the Federal Court against travel website Trivago.
The ACCC alleges Trivago breached Australian Consumer Law by presenting its website as impartial in television and website advertising. Trivago claims to aggregate deals offered by hotel proprietors and online travel sites – like Expedia and Hotels.com.
But in many cases the highlighted price was not the cheapest available, the ACCC said in a statement.
“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,” 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.”
Trivago ran its TV advertisements more than 400,000 times between 2013 and April 2018.
According to the ACCC investigation, consumers who visited Trivago’s website 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,” 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.”
The ACCC filed proceedings against Trivago in the Federal Court on Thursday.
Trivago is part of the NASDAQ-listed Expedia Group, its main source of revenue is through cost-per-click payments where advertisers are charged a fee each time a user clicks on one of their offers.
