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Trivago fined $44.7 million for misleading customers

Trivago

Trivago fined $44.7 million for misleading customers

After booking service Trivago was fined $44.7 million for deceiving clients about the cheapest hotel rooms, Australians are being reminded about the perils of trusting online travel agents.

On Friday, a federal court found that Trivago must pay a “substantial penalty” for misleading Australians by claiming to give the greatest hotel deals when they were actually charged millions to advertise more expensive deals.

This is in direct contrast to Trivago’s massive television and web advertisements, which claim to be a lighthouse for locating the cheapest lodging.

The Australian Accommodation Association’s CEO, Richard Munro, has been flagging questionable booking site practices to the ACCC.

He praised the court’s decision on Friday, telling TND that consumers should be wary of assurances made by booking websites.

“The hierarchy of how a hotel appears in their algorithms comes down to what commissions they’re extracting out of owners,” Mr. Munro said.

“This case should be a signal to Australian consumers to really think about how they’re booking accommodation.”

Trivago was forced to disclose charging $58 million in “cost-per-click” fees to accommodation operators in order to priorities their more expensive room listings during court hearings.

The Australian Competition and Consumer Commission (ACCC) said in a press statement on Friday that as a result of this, consumers overpaid $38 million for rooms that weren’t the lowest at their hotel.

Trivago misled users into thinking they were receiving a great hotel deal when they weren’t, according to ACCC chair Gina Cass-Gottlieb.

They also misled consumers by employing “strike-through prices,” which gave the false impression that hotel rates were reduced when, in fact, basic rooms were simply compared to luxury accommodations, she claimed.

“Trivago’s conduct took advantage of consumers’ desire to find the best deal, and the Court’s decision to order such a significant penalty reflects the seriousness of Trviago’s conduct,” Ms. Cass-Gottlieb said.