Trivago fined for misleading customers on pricing

Popular travel website Trivago has been slammed for using a ranking system to mislead consumers about cheap hotel deals.

Australia’s Federal Court has found travel comparison site Trivago guilty of misleading and deceptive conduct over prices advertised and commission rates.

The Australian Competition and Consumer Commission (ACCC) brought the charges against Trivago for suggesting that its first-placed prices on properties were the best.

But hotels were instead found to have been ranked based on how much commission each paid Trivago.

Trivago, owned by US-based Expedia and Booking.com, was found to have not suggested the best prices, which were filtered out of its list.

In some cases, the Dusseldorf-based company was found to have compared prices of standard and luxury rooms.

The Australian Federal Court will schedule a hearing in coming months to determine the penalties, The Australian reports.

Trivago has been fined over misleading consumers.

The newspaper reports that Trivago changed some of its tactics following the ACCC’s probe.

The NZ Herald has contacted the Commerce Commission to see if it has received complaints over similar behaviour by New Zealand consumers.

In August, the ACCC said it had instituted proceedings against Trivago for misleading hotel pricing representations in its television advertising and website in breach of Australian Consumer Law.

The ACCC alleged that Trivago advertisements from December 2013 presented the site as an impartial and objective price comparison service that helped to identify the cheapest prices for hotel rooms, but it instead prioritised advertisers who were willing to pay the highest cost per click to the company.

“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 in August.

The ACCC alleged that Trivago advertisements from December 2013 wrongly presented the site as an impartial and objective price comparison service.

“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.”

Last year, New Zealand’s Commerce Commission outlined online retailing as one of its main focus areas for the 2019/20 year.

In an interview with the Herald, Commerce Commission general manager of competition and consumer, Antonia Horrocks, said the watchdog was working to stamp out misleading “pressure tactics” used by retailers to rush purchases online.

Phrasing such as “only five rooms left”, “the offer finishes in 24 hours” with a countdown or “(insert name) from Auckland just bought,” often used by comparison sites such as Expedia and Booking.com, would be vetted by the commission, Ms Horrocks said last year.

Such comments were identified as pressure selling or “nudge” tactics – a concern within online retail first identified at the International Consumer Protection and Enforcement Network’s “internet Sweep Day” last year where enforcement agencies from around the world reviewed websites at the same time to identify sales tactics used online globally.

This article originally appeared on the New Zealand Herald and was reproduced with permission