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Trivago caught misleading customers

August 24, 2018

 

Trivago has found it itself in the competition regulators gun sights for breaching Australian Consumer Law (ACL).  


The ACCC said last week that the Trivago Hotels had been presenting their site as impartial price comparison services since December 2013, but the regulator alleged that the website was prioritising those who were willing to pay the ‘highest cost per click fee’. 


The comparison service earlier this month announced the acquisition of US AI Travel start-up called TripHappy which would help to personalise the hotel searches. 


“We are always looking for innovative ways to solve the hotel search problem, making it easier for travelers to find their ideal accommodation,” said Elie Matta, Head of Corporate Development at Trivago. “The TripHappy team’s long-term vision aligns with our own, and we believe the team’s approach to product innovation will be a great fit.”


However, ACCC chairman Rod Sims alleges that their comparison service would have left consumers to form an ‘incorrect impression’ that they were being presented with the best prices. 


“We allege that because of the design of Trivago’s website and representations made, consumers were denied a genuine choice about choosing a hotel deal, by making choices based on this misleading impression created by the Trivago website,” Sims continued. 


The ACCC continued to allege that the ‘strike-through’ price comparisons were misleading because they were being compared to the standard rooms in luxury hotels.


“We are very concerned that such platforms convey an impression that their services are designed to benefit consumers, when in fact listings are based on which supplier pays the most to the platform”.

 

Update Monday 27th, August 

 

The GRC Professional reached out to Bronwyn Gallacher  Managing Director at CCL Consultants who has been following developments in consumer and competition law. 

 

"It is likely that the ACCC has decided to pursue litigation in relation to Trivago's alleged false or misleading conduct given that comparison sites need to ensure that any information being provided to potential and/or actual customers is correct in terms of 'real' market conditions. The ACCC alleges that Trivago based its ranking of potential deals on the high cost it received per click from its advertisers." Gallacher said. "Companies who decide to advertise prices, quality of services and/or other data need to ensure they are providing an objective perspective, which is not influenced by commissions or third party payments. Alternatively, companies who adopt a business model, which rely on commissions or third party payments as a revenue stream, need to advise customers of this modelling to ensure that transparency exists within the marketplace for consumers." 

 

 

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