(Reuters) -An Australian court fined Trivago, a unit of U.S.-based online travel firm Expedia (NASDAQ:EXPE) Group, A$44.7 million ($32.91 million) for misleading consumers over hotel room rates, in what would be one of the country's largest payouts for breaching consumer law.
The Federal Court issued https://www.accc.gov.au/media-release/trivago-to-pay-447-million-in-penalties-for-misleading-consumers-over-hotel-room-rates the fine on Friday after finding Trivago, a hotel booking website, falsely presented hotel rooms as being the cheapest available, when it was in fact promoting rooms of paid advertisers.
In January 2020, the court found that Trivago had breached Australian Consumer Law by misleading consumers by using an algorithm that pushed hotels paying "the highest cost-per-click fee" higher, and not highlighting the cheapest rates for consumers, the Australian Competition & Consumer Commission (ACCC) said.
"The loss or damage caused by Trivago's contraventions was substantial. This arose from consumers making a booking in relation to a non-cheapest Top Position Offer when they could have booked a room at the same hotel at a cheaper price," Federal Court Judge Nathan Moshinsky wrote in the judgment.
ACCC Chair Gina Cass-Gottlieb said that 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 the company's conduct.
"Following the initial judgement, which offered new guidance about how results of comparator websites should display recommendations in Australia, Trivago worked quickly to change its website so as to comply with the court's decision," the online hotel search platform told Reuters.
($1 = 1.3581 Australian dollars)