ACCC says Trivago should be fined $90 million for misleading Australian consumers

The Australian Competition and Consumer Commission (ACCC) has called for hotel search and price comparison platform Trivago to be fined $90 million for misleading Australian consumers.

The Netherlands-based company may face that penalty for having told customers it would show cheapest room rates when the service it provided did “almost the opposite”, instead prioritising deals from its highest advertisers.

The Federal Court ruled the travel booking platform was guilty of misleading consumers in January 2020 when the ACCC took action on claims its website showed the lowest prices despite its algorithm favouring its advertisers.

Speaking at a penalty hearing before the Federal Court at the end of last month, the ACCC’s lawyer Tim Begbie said Trivago’s actions were intentional and had serious and far-reaching consequences, based on its business model.

As reported by Guardian Australia, Begbie advised “what Trivago delivered to consumers was almost the opposite of what it promised.”

Begbie said the sheer volume of searches conducted on the site over during the period of time it was making the false claims meant the company could face fines of hundreds of billions of dollars, but that was much more than the watchdog would seek.

Instead, the ACCC wants Trivago to be fined a minimum of $90 million, making it one of the largest penalties imposed in Australia for breaching consumer law.

The Canberra Times reported that the false claims were featured on Trivago’s website more than 400,000 times from late 2013 to mid-2018.

Trivago’s lawyers argued that a penalty of $15 million would be an adequate penalty.

In its January ruling, the Federal 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.

Trivago tried to appeal the Court’s decision in November 2020, but was dismissed.

The penalty hearing before Justice Mark Moshinsky continues.

Netherlands-based Trivago N.V., is majority owned by US travel company Expedia Group which has a majority of the company's stock.

Image: The ACCC has said Trivago should be fined a minimum of $90 million for misleading Australian customers. Credit: Thiago Prudencio/Sopa Images/Rex/Shutterstock.