ACCC says hotel booking company deserves huge fine for misleading customers
Customer watchdog the Australian Competition and Consumer Commission wants travel booking company Trivago fined a minimum of $90 million for misleading consumers about its hotel room rates.
Image: Vojtech Bruzek/Unsplash
A fine of that size would be one of the highest ever imposed in Australia for the contravention of consumer laws.
Trivago was found guilty in 2020 for telling consumers it would show them the cheapest rates, when it actually ranked hotels by factoring in which advertisers paid the highest per-click fee.
The misleading claims were featured in advertising and on its own site more than 400,000 times from late 2013 to mid-2018.
Tim Begbie QC, for the ACCC, told the Federal Court on Monday that Trivago’s conduct was serious and far reaching.
He argued the weighting of search results according to what Trivago got paid was at the heart of its business model, and it offered a service it did not provide.
“What Trivago delivered to consumers was almost the opposite of what it promised,” he said.
There was no suggestion Trivago’s conduct was an accident, he argued, rather its ranking model was “careful and calculated”.
The court heard there were 213 million searches for hotel rooms on the Trivago site over a period of about 13 months, which was less than half of the period the company had misled people.
This meant Trivago could theoretically face a maximum penalty in the hundreds of billions of dollars, Mr Begbie said, but that was vastly more than what the ACCC would ever seek.
Lawyers for Trivago have argued a fine of $15 million is an adequate penalty.
The penalty hearing before Justice Mark Moshinsky continues.