The Australian Competition and Consumer Commission is taking action against online travel agency Trivago for misleading customers.
The ACCC has begun court proceedings, alleging that Trivago’s television advertising and website broke Australian Consumer Law.
Beginning as early as December 2013, Trivago’s advertisements told customers that its website was a source for neutral, objective price comparison of a hotel room. This isn't the case, as Trivago’s website gives the highest paying advertisers preference on a cost-per-click basis.
“This case highlights growing concerns the ACCC has in relation to comparison platforms, and on how algorithms present search results to consumers,” said ACCC chair Rod Sims.
“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"
Trivago’s ran the advertisements over 400,000 times in Australia from December 2013 to April 2018.
“Businesses must ensure the nature of search results, such as if they are sponsored or paid for, is made clear to consumers or they risk contravening the Australian Consumer Law.”
Trivago also broadcast similar advertisements in New Zealand, but as of now the New Zealand Commerce Commission is not taking the same actions against the OTA.
“We do not have a current investigation but will be monitoring the ACCC’s action against Trivago,” said a spokesperson from the New Zealand Commerce Commission.
