Trivago hit with $44.7m fine for misleading website

Hotel booking company Trivago has copped a massive fine for misleading consumers on ‘best deals’ room prices after the consumer watchdog took action.

Screen grab of the Trivago TV advert that has misled people. Trivago has been fined $44.7m after it misled Australian consumers.

Expedia-owned hotel booking platform Trivago has been slapped with a $44.7m fine in the Federal Court after the competition regulator took aim at it for misrepresenting the price of hotel rooms.

The Australian Competition and Consumer Commission had taken action against Trivago alleging it had breached consumer law by telling consumers it would get them the best deal on room rates, when in fact it wasn’t.

Federal Court judge Mark Moshinsky said Trivago‘s contraventions of consumer law were “extremely serious” and amounted to ”highly misleading” conduct.

Senior travel executives were surprised by the size of the fine given the earnings Trivago pocketed during the breach.

Speaking from Brisbane, Flight Centre managing director Graham Turner told The Weekend Australian it was unacceptable behaviour. “They were promising people the best deal, but it’s really the best deal for them, not the customer. It depends on what they have admitted but the $44.7m fine does seem rather steep,” he said.

Accommodation Association chief executive Richard Munro said his association are continually alerting the ACCC to exploitative practices. ’We want the ACCC to now cast their net wider and review price parity rules where similar large, overseas-based multi national corporations threaten Australian accommodation providers with exclusion if the accommodation provider offers a better rate online,” Mr Munro said.

“Australian travel consumers deserve access to the best available rates, and the only way to guarantee that outcome is to book directly with Australian accommodation operators or though your local travel business.”

The top position displayed on Trivago’s websites was often not the cheapest deal.

Justice Moshinsky found Trivago’s television advertising campaign, which saw the company spruik its purported potential to land good deals on hotel rooms, was particularly egregious.

Justice Moshinsky found Trivago’s “strike-through price” comparisons created the false impression of savings on rooms, when in fact they did not.

Trivago placed significant weight on which hotels paid Trivago the highest cost-per-click fee in ranking ads for rooms.

Justice Moshinsky found the top position displayed on Trivago’s websites was more expensive in 66.8 per cent of listings. He added that 93 per cent of clicks on Trivago’s website went to those top position offers, noting “a large number of consumers” were affected by the misleading conduct.

Trivago pulled in almost $92m from these non-cheapest top position offers out of its total $178m income in Australia over the period.

The court found consumers paid $38m more for their hotel rooms due to Trivago’s conduct between 2016 to 2018.

The fine comes after the ACCC took aim at Trivago in 2018, with the federal court finding in 2020 the company had breached consumer laws on multiple occasions.

The ACCC had been angling for a $90m hit to Trivago for its misleading conduct. This was compared to Trivago’s arguments a $15m fine would suffice.

ACCC chair Gina Cass-Gottlieb said Trivago’s conduct misled consumers “into thinking they were getting a great hotel deal when that was not the case”.

In a statement, Trivago said that following the initial judgment which offered new guidance about how results of comparator websites should display recommendations in Australia, it had changed its website so as to comply with the court’s decision.

“We look forward to putting this behind us,” the company said in a statement on Friday.