Trivago is a global hotel booking site that claims to make it easy to find "the best price" for rooms. However, they have fallen foul of Australian consumer law and were fined almost $45 million for misleading customers.
The fact that the online booking sites were paying Trivago was not made clear to consumers. Most of the time, the hotels listed at the top of the search results were not the best or cheapest deals but the hotels that paid them the biggest fees. Trivago also misled consumers by using strike-through prices, which gave them the false impression that rates represented a saving, when in fact, they often compared a standard room with a luxury room at the same hotel.
The Federal Court estimated that consumers ended up paying about $30 million more for their hotel rooms than if they had always clicked on the cheapest offer. Their conduct took advantage of consumers' desire to find the best deal, and the significant penalty reflects the seriousness of Trivago's transgression.
This penalty serves as a warning to all comparison websites that they must not mislead consumers with the promises and recommendations they make.
The fact that the online booking sites were paying Trivago was not made clear to consumers. Most of the time, the hotels listed at the top of the search results were not the best or cheapest deals but the hotels that paid them the biggest fees. Trivago also misled consumers by using strike-through prices, which gave them the false impression that rates represented a saving, when in fact, they often compared a standard room with a luxury room at the same hotel.
The Federal Court estimated that consumers ended up paying about $30 million more for their hotel rooms than if they had always clicked on the cheapest offer. Their conduct took advantage of consumers' desire to find the best deal, and the significant penalty reflects the seriousness of Trivago's transgression.
This penalty serves as a warning to all comparison websites that they must not mislead consumers with the promises and recommendations they make.
