Trivago confesses to false advertising in Australia
In a startling streak of honesty, Trivago has admitted that it led customers into believing that the results page shows the lowest prices in the “more deals” section.
In August, the Australian Competition and Consumer Commission (ACCC) took Trivago to court saying that the site violated Australian Consumer Law by showing misleading hotel prices through its TV and online advertisements from December 2013 to April 2018.
Moreover, Trivago compared luxury rooms with standard rooms making consumers believe that they are buying the best deal, even if it is not the case. In the end, the consumers are led into availing hotels that paid the company more commission than others or “prioritized advertisers who were willing to pay the highest cost per click fee,” said the ACCC in a statement.
The ACCC also alleged Trivago’s “strike-through” price comparisons were misleading, as the strike-through price was often for a more expensive luxury room compared with a standard room.
Trivago comes clean of its misconduct and said, “By displaying the strike-through price next to the top position offer in the form it was displayed either on its own or in conjunction with the percentage savings box.”
“Trivago may have caused some consumers to form an erroneous belief that the top position offer and the strike-through price were offers for rooms in the same room category.”
Trivago has since updated their website to tell customers that hotels are ranked by “compensation paid by the booking site.”
The case is still being heard in court and another deliberation is set for 14 December 2018 in Melbourne. Trivago may face a hefty fine for this, expected to be up to USD 10 million.
However, this settlement of the fine may not be the end of Trivago’s legal troubles. The New Zealand Commerce Commission said while it did not have a current investigation into Trivago it was following court proceedings in Australia and chances of another one following are floating on.
Comments are closed.