ACCC Probes Trivago For Breaching Consumer Law Via TV Ads

ACCC Probes Trivago For Breaching Consumer Law Via TV Ads
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Travel company Trivago has come under fire for misleading television advertising from 2013 until now, according to the Australian Competition and Consumer Commision (ACCC).

In a press release, the ACCC stated Trivago had “misled hotel pricing representations in its television advertising and website” which “breached the Australian Consumer Law.”

The ACCC cited Trivago’s lack of impartiality in its TV ads as its cause for instituting proceedings against the travel company in federal court.

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According to the ACCC, “Trivago ran TV advertisements presenting its website as an impartial and objective price comparison service that would help consumers identify the cheapest prices for hotel rooms when, in fact, Trivago’s website prioritised advertisers who were willing to pay the highest cost per click fee to Trivago.

Adding, “Trivago’s website aggregates deals offered by online travel sites… in many cases the highlighted price was not the cheapest available at that hotel.

Speaking on the move, ACCC chair Rod Sims said: “Based on Trivago’s highlighted price display on its website, we allege that consumers may have formed the incorrect impression that Trivago’s highlighted deals were the best price they could get at a particular hotel, when that was not the case. Trivago based its rankings on the highest cost per click it would receive from its advertisers.

“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 added.

The ACCC also alleges that Trivago’s online strike-through price comparisons were false or misleading because they often compared an offer for a standard room with an offer for a luxury room at the same hotel, creating a false impression of savings offered for the standard room.

Commenting on this, Sims said: “We also allege that by not making genuine room price comparisons, consumers would likely have paid more than they otherwise would have for the same hotel. Further, hotels may have lost potential business as a result of this alleged conduct.

The ACCC investigation also uncovered data that shows consumers who visited Trivago’s website overwhelmingly clicked on the most prominently displayed offers for each hotel.

“This case highlights growing concerns the ACCC has in relation to comparison platforms, and on how algorithms present search results to consumers,” Sims said.

“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”

“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.”

B&T has approached Trivago for comment.

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