‘Unbelievable behaviour’: Trivago misled customers about the cheapest hotel deals
Travel comparison website Trivago is facing a hefty fine after the Federal Court found the company guilty of repeatedly misleading consumers about hotel room rates online and in television advertisements.
Trivago claimed in its advertising that it helped users easily find the cheapest rates available at a given hotel, when, in fact, it used an algorithm which favoured the online hotel booking sites which paid Trivago the most, not those which had the cheapest rates.
The travel website also used misleading price comparisons on its website.
Chair of the Australian Competition and Consumer Commission, Rod Simms, said the behaviour is “unbelievable”.
“This is a stunning one: they were giving people the impression of large discounts where the comparison between the old price and the new was actually between a standard room and a luxury room!”
The court found Trivago’s breaches of consumer law began in December 2016 and continued until at least July 2018. Most of the offences occurred under the old penalty regime which imposed a maximum fine of $1.1 million per breach.
In late 2018, tougher new penalties were imposed, allowing courts to fine companies up to $10 million or 10 per cent of turnover, whichever is higher.
“With big companies now we’re going to be seeing penalties of hundreds of millions of dollars,” Mr Simms said.
“But here most of the behaviour was under the old regime.
“If we come after them again the penalties will be absolutely huge.”
A hearing to determine the penalty meted out to Trivago will be held at a later date.
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