Australia’s consumer watchdog’s court case against Trivago alleging the OTA deceived consumers officially kicked off on Monday.
The Australian Competition and Consumer Commission’s (ACCC) is accusing the OTA of withholding cheaper deals from consumers in favour of higher cost-per-click offers. The watchdog produced memos in court that showed Trivago invited advertisers to pay more to “block” rival offers, according to the Sydney Morning Herald.
Trivago’s website aggregates deals offered by online travel sites (like Expedia, Hotels.com and Amoma) and hotel proprietors for available rooms at a hotel and then highlights one price out of all their advertisers, which the ACCC alleges created an impression it is the best deal.
However, in many cases the highlighted price was not the cheapest available at that hotel.
“The website has not ever, and does not today, in fact, enable consumers who are searching on the web and using a Trivago website to quickly and easily identify the cheapest prices available for a particular hotel room,” Norman O’Bryan, SC, representing the ACCC, told the court on Monday, according the SMH.
“Trivago’s advertising was explicitly representing that Trivago was taking in hundreds of online advertising sources, and had millions of hotels around the world which it was sorting.
“The reality is if that advertiser did not bid enough cost per click to attract Trivago’s attention then that bid would be ignored, even if it was the best price offer.”
Trivago has already admitted it misled Aussies through its iconic TV ads, but told the SMH it will “vigorously dispute the allegations we prioritise when displaying offers on our website” in court.
“We’re constantly improving the services available through our website with the interests of Australian consumers in mind, and our advertising aims to reflect the significant benefits we provide,” the OTA said.
“This includes changes we made to our Australian website and advertising over the past several years to address the ACCC’s concerns.”
However, according to O’Bryan, while the OTA has adjusted its website in response to the case, it failed to communicate the fact that a large number of cost-per-click bids are excluded because they are considered too low.
“It is schoolyard economics that if you push advertisers to pay more they will likely raise prices in order to recover that extra outlay,” he told the court.
Trivago faces a multimillion-dollar fine if the ACCC wins the case.
Travel Weekly has contacted Trivago for comment.