Trivago fined $44.7m for falsely
advertising hotel room prices as best price
There must be a good reason
to advertise best price,
otherwise, a large fine may be
payable for contravening the
Australian Consumer Law.
Trivago had no reason and will
pay a large fine.
Trivago conducts an online search and price comparison
platform for hotel accommodation. The Trivago business model
is aggregating online hotel offers made by participating
hotels or online travel agents and displaying these offers
on its website. The website presents prices from a number of
different Online Booking Sites for a particular hotel,
ranked according to best (cheapest) price.
When a customer clicks on an offer, they are directed to
the Online Booking Site. Each time a consumer clicks on an
offer for accommodation, the hotel or travel agent whose
site it is pays a fee (Cost Per Click or CPC) to Trivago.
Trivago spends in the order of 75% of its revenue on
advertising to attract consumers to the website, because the
online travel industry is highly competitive. Competitors
include review websites, search engines, independent hotel
chains, online travel agents and alternative accommodation
Trivago’s headquarters are located at Düsseldorf in
Germany. Sales and marketing and technical management of the
website are located there. It employs no Australian staff.
It derived substantial revenue from its Australian platform
of A$178 million (in the period from 1 December 2016 to 13
September 2019), yet had no policies or procedures to ensure
compliance with the Australian Consumer Law.
The Trivago website
Trivago’s Australian website enables searches for hotels
by city or region or by hotel for desired dates and room
Offers are based on real-time data. When a consumer
generates a search in a given region, Trivago sends a
request to all Online Booking Sites in that region asking
for the lowest available rate for each hotel and for
relevant stay dates. This process is repeated when a
customer clicks on the “More Deals” button for a particular
Hotels are listed on the Initial Search Results Page.
This is the example from the judgment:
From 1 December 2016 to 13 September 2019 (the “Relevant
- The ‘Top Deal’ price for the hotel was displayed in
the far right column, in green text, in a relatively
large font and with space around it. The name of the
Online Booking Site making that offer and a green “View
Deal” click-out button were also displayed.
- Initially a red ‘strike through price’ appeared
above the price. Later, a single price appeared in red
text with no strike through price or green price. The
price was a comparison between prices offered on
different booking sites for the same room category in
the same hotel.
- Three more price offers were displayed in the column
second from the right. They are displayed in a smaller
font compared with the far right column.
- A “More Deals” button is displayed below these price
offers. If clicked, other offers from Online Booking
Sites for the selected hotel are displayed.
- If a consumer clicks on an Online Booking Site’s
offer on the Trivago website, the consumer is taken to
the Online Booking Site’s website and may complete the
booking by using the Online Booking Site’s website’s
- Trivago advertised on television that it makes it
easy “to find the ideal hotel for the best price”. The
statement was repeated on its website.
The ACCC’s concerns
The ACCC was concerned that the “Top Deal” (“Top Position
Offer”) was in many cases not the best or cheapest
price available for the particular hotel room, because
Trivago had manipulated the display in three ways:
- The Trivago website only displayed offers made by
Online Booking Sites that had agreed to pay an amount of
money – referred to as the Cost Per Click or “CPC” – to
- Unless the CPC offered to be paid by the Online
Booking Site exceeded a minimum threshold set by Trivago,
the offer did not appear on the Trivago website.
- Trivago used an algorithm to select the offer to
appear as the Top Deal. A very significant factor in
determining which offer would be the Top Deal was the
amount of the CPC to be paid by the Online Booking Site
The manipulation was hidden from consumers.
In addition, the ACCC was concerned that the Trivago
website, and the Initial Results Search Page in particular,
would lead consumers to believe that the Trivago website
provided an impartial, objective and transparent price
comparison to identify the cheapest room available which met
their criteria at a particular hotel, when this was not the
The Court agreed with the ACCC’s concerns and found that
Trivago had contravened these provisions of the
Australian Consumer Law –
s 18 – misleading and deceptive conduct
s 29(1)(i) - false or misleading representations about the
price of goods and services
s 34 - misleading conduct as to the nature of services
The Court said “Trivago’s contraventions of the
Australian Consumer Law were systemic and were a product
of its business model”. The television advertising and the
design of the Top Position algorithm were “intentional”.
On 22 April 2022, the Federal Court decided the
appropriate penalty and other orders for the conventions -
Australian Competition and Consumer Commission v Trivago
N.V. (No 2)  FCA 417 (Moshinsky J). This article
deals with the penalty decision.
The penalties and the
reasons for the penalties
The Court ordered Trivago to pay pecuniary penalties
totalling A$44.7 million, taking into account the
representations and conduct during the Relevant Period.
The Court also made a restraining order that for five
years Trivago not display as “Top Deals” a price offer that
was not the cheapest available or which had some other
characteristic that made it more attractive than any other
available offer for the hotel.
The Court gave six reasons:
- The contraventions were “extremely serious”. The
television advertising was “highly misleading” in that
it gave the impression that the Trivago website would
“quickly and easily identify the cheapest rates
available for a hotel room responding to a consumer’s
search”, when in fact the Trivago website did not do
this. The Court referred to the expert evidence that
consumers selected higher offers because they were shown
as Top Deals over alternative lower priced offers, in
66.8% of listings.
- It was “highly misleading” for Trivago to represent
on its website that the Top Deals 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, because of the way
that Trivago manipulated the display.
- The conduct extended for a long time – nearly three
years. In the early part, television advertisements were
prominent. Throughout, the website was misleading.
- A large number of consumers were affected by the
conduct. The evidence was that during the Relevant
Period, there were approximately 111 million click-outs
on the Trivago website. The overwhelming majority
(approximately 104 million or 93%) of the click-outs
were on the Top Deal. There were approximately 57
million click-outs on a Top Deal for an identified hotel
where the Top Deal was not the cheapest offer for that
- The loss or damage to consumers caused by Trivago’s
contraventions was substantial. The Court found that
Australian consumers paid A$36,985,090 more for bookings
made on the non-cheapest Top Deals than if they
had booked on the cheapest offer from the same
hotel. After cancellations, the loss was A$30 million
caused by Trivago’s contraventions. Trivago has not
compensated the affected consumers.
- Trivago derived substantial revenue from its
contravening conduct of A$178 million during the
Relevant Period. Trivago’s submissions that the fine
should be closer to A$15 million than the A$90 million
that the ACCC was contending for were based on net
income from its Australian operations of A$6.72 million
over the 2017, 2018 and 2019 calendar years. The Court’s
view was that revenue, not profits from the Australian
operation was relevant to assessing benefits to Trivago
from the contraventions.
The ACCC is sensitive to price representations because
consumers are sensitive to price. Prices must be
And if the price is advertised as “best price”, “cheapest
price” or “lowest price”, there must be a good reason for
describing it in that way.
See my commentaries on the liability decisions:
rooms? Probably not? Trivago’s top deals are hotels which
pay the most and
How the Trivago online business model
failed the Australian Consumer Law test