Trivago misleads consumers about hotel room rates

Trivago was found guilty of misleading consumers regarding hotel room rates, leading to a substantial penalty imposed by the Federal Court of Australia.

The court determined that Trivago violated Australian Consumer Law by falsely claiming its platform provided the cheapest hotel rates. Instead, the company used an algorithm that prioritised listings based on which booking sites paid the highest cost-per-click fees, rather than presenting the lowest available prices to consumers.

Trivago was fined AUD 44.7 million for its misleading practices, which were deemed intentional and caused Australian consumers to overpay approximately AUD 30 million. The misleading claims were prevalent in both its website and television advertisements from late 2013 to mid-2018.

The court found that Trivago's algorithm led to higher-priced options being displayed as the "Top Offer" in 66.8 percent of listings, misleading consumers into believing they were receiving the best deals and creating a false impression of savings.

Following the ruling, Trivago was required to ensure that any "Top Offer" displayed was either the cheapest available or had distinguishing features that justify its ranking. The court's decision served as a warning to other comparison websites to maintain transparency in their pricing practices.

This case was seen to highlight the importance of ethical marketing and algorithmic transparency in the online travel industry.