Trivago has admitted it misled Australian consumers with its iconic TV ads.
Now, it could face fines of up to $10 million.
The hotel comparison site aired ads with its famous Trivago girl claiming highlighted deals would advertise the best price when in fact it skewed the prices shown to favour advertisers willing to pay a higher cost per click fee.
The ACCC took Trivago to the federal court in August, alleging it made misleading hotel price representations and presenting itself as impartial when in reality it prioritised advertisers.
“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.
“Trivago based its rankings on the highest cost per click it would receive from its advertisers.
“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.
“Further, hotels may have lost potential business as a result of this alleged conduct.”
According to the Daily Telegraph, the website said its “lowest rate statements may have caused some consumers to form an erroneous belief that the initial search page offers were the lowest rates.”
It also admitted by displaying a red “strike-through price” alongside the green “top position offer” it “may have caused some consumers to form an erroneous belief that the top position offer and the strike-through price were offers for rooms in the same room category”
Trivago admitted to multiple breaches of Australian consumer law in both cases and could be facing fines of more than $10 million, with each breach costing a penalty of up to $1.1 million.