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22 January, 2020

Trivago licks its wounds after court loss, as industry bodies applaud ruling

Düsseldorf, Germany - December 3, 2018: The image shows the new headquarters of Trivago, a German transnational technology company specializing in internet services and products in the lodging and hotel field

Trivago has responded to the Federal Court of Australia’s ruling that the online travel agency misled consumers about hotel room rates on its website and in its TV ads.

The court ruled yesterday that from at least December 2016, Trivago misled consumers by representing its website would quickly and easily help users identify the cheapest rates available for a given hotel.

The court also found Trivago’s hotel room rate comparisons that used strike-through prices or text in different colours gave consumers a false impression of savings because they often compared an offer for a standard room with an offer for a luxury room at the same hotel.

Furthermore, Trivago misled consumers to believe that its website provided an impartial, objective and transparent price comparison for hotel room rates until at least 2 July 2018.

The case was brought before the court by the Australian Competition & Consumer Commission (ACCC) back in August 2018.

Speaking to Travel Weekly, a spokesperson for Trivago said the OTA will “closely review” the decision.

“The judgment received yesterday from the court provides new guidance on how results of comparator websites like Trivago and others should be displayed in Australia,” the spokesperson said.

“We are working to quickly understand the implications of this decision on our website design and its overall impact on the Australian travel industry and the way websites are to be designed in Australia.

“We will continue helping millions of Australians research and find great accommodation deals and look forward to continuing to help our customers find their ideal hotel.”

Industry bodies welcome ruling

Tourism Accommodation Australia (TAA) chief executive Michael Johnson said the Federal Court ruling sent a very clear signal that Trivago’s practice of ranking listings based on the commissions they paid to the website, rather than the lowest price available, was misleading and deceptive.

“There have been widespread concerns regarding the behaviour of online travel websites over a number of years now, particularly in regards to allegations about misleading and aggressive tactics,” he said.

“The fact that the ACCC described Trivago’s behaviour as ‘particularly egregious’ shows that this is not a benign or trivial breach – their behaviour was deliberate and widespread.

“Given the influence that booking platforms such as Trivago have in Australia’s accommodation industry, behaviour such as this has the potential to have a significant negative impact on our hotels and the tens of thousands of jobs that they support.”

Johnson added that the ruling follows representations that TAA have made to the ACCC in regard to concerns about Trivago’s misleading and deceptive behaviour.

Dean Long, CEO of the Accommodation Association, said the verdict not only sent a strong message on misleading and deceptive conduct, but clearly demonstrated that the ACCC is prepared to take strong enforcement action when online travel agents are found in breach of Australian consumer law.

“The verdict reinforces the importance of guests booking directly with their accommodation provider to ensure they obtain the best deals available,” he said.

Long said the association will continue to work with the ACCC, reinforcing OTA behaviours that restrict the ability of customers to get the best possible deal.

The court ruling follows the success of the UK’s Competition and Markets Authority last year in enforcing action with six OTAs due to due to concerns around pressure selling, misleading discount claims, the effect that commission has on how hotels are ordered on sites, and hidden charges.

Trivago, Expedia, Booking.com, Agoda, Hotels.com, and Ebookers all signed undertakings to stop “pressure selling, misleading discount claims and hidden charges”.

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Email the Travel Weekly team at traveldesk@travelweekly.com.au

accc Accommodation Association Australian Competition Consumer Commission Dean Long federal court Federal Court of Australia Michael Johnson online travel agency ota taa tourism accommodation australia trivago