Popular travel company misleading consumers by falsely claiming to offer “best prices”
Hotel comparison site Trivago has been accused of misleading customers by falsely claiming to offer the “best price” when the website is instead favouring businesses who pay the most.
The Australian Competition and Consumer Commission has taken the company to Federal Court, saying that the travel website has been prioritising advertisers who are paying the highest per click.
ACCC chairman Rod Sims told the ABC that Trivago’s advertising claims to offer the best priced-hotels on its site, which he says is “deliberately designed” to be misleading.
Mr Sims said Trivago gave “the impression they're there to help consumers when in fact they're there to help suppliers who pay them the most money”.
“We looked at Trivago algorithm and formed the view that it was misleading in terms of the way it presented options to consumers,” he said.
The ACCC started an investigation into the company after they received complaints from hotel operators who said their prices were cheaper, yet they were not being prioritised on the website.
Mr Sims said Trivago’s prices were often misleading because they compared the cost of a ‘luxury’ room with a ‘basic’ room.
“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,” he said.
Speaking with the Sydney Morning Herald, Mr Sims said Trivago was focused on servicing the needs of suppliers, rather than those of consumers.
“We would allege it's all to do with Trivago making their site look more attractive to the suppliers. Not the consumers, the suppliers,” Mr Sims said.
“(The hotels were) looking at the fact that they figured they had the best price, but they could see that advertiser payments had the dominant role in the search.”
Trivago’s ads an on TV from 2013 until April this year and claimed that the website had the “best price” for hotel rooms.
A spokesman for Trivago said the company would be “vigorously” defending the allegations and was “disappointed by the action the ACCC had chosen to take”.
“We agree with the ACCC's earlier public statement that 'comparator websites can assist consumers to make more informed purchasing decisions when comparing what are often quite complex products, and can promote healthy competition by assisting small or new service providers to compete more effectively,” he said.
“Our priority is to enable Australian travellers to find their ideal hotel.”
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