Australian Competition and Consumer Commission v Trivago N.V.  FCA 16
On 23 August 2018, the Australian Competition and Consumer Commission (“ACCC”) filed an application in the Federal Court of Australia (case number VID1034/2018) against Trivago N.V. (“Trivago”). The application primarily focuses on the conduct of Trivago which the ACCC alleged was misleading or deceptive to Australian consumers. Fast forward to 20 January 2020 and the Federal Court handed down its decision ruling that Trivago had mislead consumers.
For those who aren’t aware, Trivago is a price comparison website for hotel rooms which receives commissions from click-through bookings. The Court found that Trivago mislead consumers into thinking that Trivago was an impartial, objective and transparent price comparison website which would enable consumers to quickly and easily identify the cheapest available offer for a particular (or the exact same) room at a particular hotel.
In summary, the Court found four significant breaches by Trivago of the Australian Consumer Law over a number of sub-periods:
- Cheapest Price Representation.
- Top Position Representation.
- Strike-Through Representation.
- Red Price Representation.
Paragraph 9 of the judgement sets out the allegation by the ACCC in regard to the above breaches:
The ACCC alleges that Trivago made four representations at various times during the Relevant Period:
(a) that the Trivago website would quickly and easily identify the cheapest rates available for a hotel room responding to a consumer’s search (the Cheapest Price Representation);
(b) that the Top Position Offers were the cheapest available offers for an identified hotel, or had some other characteristic which made them more attractive than any other offer for that hotel (the Top Position Representation);
(c) that the Strike-Through Price was a comparison between prices offered for the same room category in the same hotel (the Strike-Through Representation); and
(d) that the Red Price was a comparison between prices offered for the same room category in the same hotel (the Red Price Representation).
The above representations, either by themselves or by combined effect both on its website and television advertisements, Trivago was found to have engaged in conduct (the representations) that was misleading and deceptive or likely to mislead or deceive.
In this case, Trivago relied heavily on comparison representations for the purpose of consumers relying on what was shown by Trivago to select accommodation at what they thought was the cheapest price. However, the decision is not limited to only comparison advertising and the decision sends a strong reminder that any representation, either by comparison or direct statements, if those representations can mislead consumers in some way, then your business is going to run afoul of the Australian Consumer Law.
With strong consumer protection laws in place in Australia, don’t believe that a ‘tricky interpretation’ will get you out of trouble.
For a better understanding of the complex issues considered by this case and the decision itself, we recommend that you click on the following:
Federal Court of Australia Judgement
Australia Consumer Law – Schedule 2