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Australian Court Fines Expedia Unit Over Misleading Offers

The penalty is Australia’s fourth-largest payout for breaching consumer law, the Australian Competition and Consumer Commission (ACCC) said in a statement


Trivago admitted that between December 2016 and September 2019 it received about A$58 million in cost-per-click fees from offers that were not the cheapest available for a given hotel. Photo: AFP

 

An Australian federal court has ordered the US-based online travel firm Trivago to pay a A$44.7 million ($32.9 million) penalty for misleading consumers over hotel room rates, the country’s competition regulator said.

The penalty is Australia’s fourth-largest payout for breaching consumer law, the Australian Competition and Consumer Commission (ACCC) said in a statement on Friday.

ACCC said Trivago – a unit of Seattle-based Expedia Group – used an algorithm which placed significant weight on which online hotel booking site paid Trivago the highest cost-per-click fee in determining which rates to highlight on its website.

As a result, Trivago often did not highlight the cheapest rates for consumers.

Trivago admitted that between December 2016 and September 2019 it received about A$58 million in cost-per-click fees from offers that were not the cheapest available for a given hotel, causing consumers to overpay hotel booking sites by about $38 million for rooms featured in those offers.

“One of the ACCC’s key priorities is to hold online businesses accountable for their representations to consumers and to ensure consumers are fully aware of the way these supposedly free services actually work and what influences the prices they display,” ACCC chair Gina Cass-Gottlieb said.

“The way Trivago displayed its recommendations when consumers were searching for a hotel room, meant consumers were misled into thinking they were getting a great hotel deal when that was not the case.”

 

  • George Russell

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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