Trivago fined $44.7m
Expedia-owned hotel booking platform Trivago has been slapped with a $44.7m fine in the Federal Court after the competition regulator took aim at it for misrepresenting the price of hotel rooms.
The Australian Competition & Consumer Commission had taken action against Trivago alleging it had breached consumer law by telling consumers it would get them the best deal on room rates, when in fact it wasn’t.
Federal Court judge Mark
Moshinsky said Trivago’s contraventions of consumer law were “extremely serious” and amounted to “highly misleading” conduct.
Senior travel executives were surprised by the size of the fine given the earnings Trivago pocketed during the breach.
Flight Centre managing director Graham Turner said it was unacceptable behaviour. “They were promising people the best deal, but it’s really the best deal for them, not the customer,” he said. “It depends on what they have admitted but the $44.7m fine does seem rather steep.”
Accommodation Association CEO Richard Munro said his association was continually alerting the ACCC to exploitative practices.
“We want the ACCC to now cast their net wider and review price parity rules where similar large, overseas-based multinational corporations threaten Australian accommodation providers with exclusion if the accommodation provider offers a better rate online,” Mr Munro said.
“Australian travel consumers deserve access to the best available rates, and the only way to guarantee that outcome is to book directly with Australian accommodation operators or though your local travel business.”
Justice Moshinsky found Trivago’s television advertising campaign, through which the company spruiked its purported potential to land good deals on hotel rooms, was particularly egregious.
He found Trivago’s “strikethrough price” comparisons created the false impression of savings on rooms.
Trivago placed significant weight on which hotels paid Trivago the highest cost-perclick fee in ranking ads for rooms.
Justice Moshinsky found the top position displayed on Trivago’s websites was more expensive in 66.8 per cent of listings. He added that 93 per cent of clicks on Trivago’s website went to those top position offers, noting “a large number of consumers” were affected by the misleading conduct.
Trivago pulled in almost $92m from these non-cheapest top position offers out of its total $178m income in Australia over the period.
The court found consumers paid $38m more for their hotel rooms due to Trivago’s conduct between 2016 to 2018.
The fine comes after the ACCC took aim at Trivago in 2018, with the Federal Court finding in 2020 the company had breached consumer laws on multiple occasions.
In a statement, Trivago said that it had changed its website so as to comply with the court’s decision. “We look forward to putting this behind us,” the company said on Friday.