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How the Trivago online
business model failed the Australian Consumer Law test
The Trivago online business
Trivago operates an online search and price comparison
site for hotel accommodation. Trivago aggregates room offers
– and displays a list of the cheapest room offers for a
selected location, stay dates and type of room searched. The
list can be filtered by rating, distance, price and
The cheapest room rate is highlighted (the ‘Top Position
Bookings are easy to make by clicking on the room offer,
which redirects the inquiry to the hotel’s website, where
the consumer makes the hotel room booking directly.
Trivago’s revenue is derived from online accommodation
booking sites. The hotel (or house or apartment) pays
Trivago a “cost per click” (‘CPC’) for each “click” on its
room offer, regardless of whether it converts into a
booking. Trivago does not charge a fee to consumers for use
of its website.
The Trivago business model was very successful. In the 13
month period from 1 December 2016 to 3 January 2018, there
were 217 million site visits to the Initial Search Results
Page (where the Top Position Offer was displayed) on
Trivago’s Australian website.
But did its success come fairly or was it from
misleading consumers? The statistics show a bias towards
the Top Position Offer. On 20 million occasions, the Top
Position Offer was clicked, but on only 4.7 million
occasions was the More Deals slide-out clicked.
The Australian Competition and Consumer Commission
prosecuted Trivago for contraventions of the Australian
Consumer Law not only for reasons of consumer protection
but also for unfair competition.
As ACCC Chairman Rod Sims explained in a media release:
“We brought this case because we were concerned that
consumers were being misled by Trivago’s claims that their
site was getting the best deal for consumers, when in fact
they were shown the deals that benefited Trivago.”
“Trivago’s conduct meant that consumers may have paid
more for a room at a hotel than they should have, and hotels
lost business from direct bookings despite offering a
cheaper prices,” Mr Sims said.
What made the Trivago
website misleading and deceptive?
In its decision Trivago N.V. v Australian Competition
and Consumer Commission  FCAFC 185 (4 November
2020), the Full Court of the Federal Court of Australia
(Middleton, McKerracher and Jackson JJ) identified four
representations made on the Trivago website and in its
television advertising which were misleading or deceptive
conduct or were false and misleading representations
contrary to: sections 18 (misleading or deceptive conduct),
29(1)(i) (false or misleading representations with respect
to the price of services) and 34 (misleading conduct as to
characteristics of services) of the Australian Consumer
1. Cheapest Price Representation
Trivago made this ‘best price’ representation in its
television advertising which it used to direct Australian
consumers to its website.
The presenter (pictured below) stated: “Trivago does the
work for you and instantly compares the prices of over
600,000 hotels from over 200 different websites … Trivago
shows you all the different prices for the exact same room …
You can be sure that you find your ideal hotel for the best
price … Hotel? Trivago”
The “best price” representation also appeared on the
website. On the Landing Page (where the location, stay dates
and room type are selected), Trivago used these slogans:
“Find your ideal hotel for the best price” and “Find your
ideal hotel and compare prices from different websites”.
The Court found that the “best price” representations
were misleading or deceptive under the Australian
The Court found that ordinary and reasonable members of
the public were misled because they chose the Top Position
Offer over alternative cheaper offers for the same room in
66.8% of cases, even though in only 33.2% of listings was
the Top Position Offer the cheapest offer.
The Court found that the main reason why a hotel room was
displayed as a Top Position Offer was because Trivago’s
Algorithm placed a significant weighting on the value of an
online booking site’s cost per click. It favoured hotels
which had paid higher fees per click.
Trivago discontinued the television advertising and
removed the ‘best price’ slogans from its website in the
course of the legal proceedings.
2. Strike-Through Price / Red Price Representation
This is an example of the Top Position Offer for an
apartment in Canberra. Note the three other offers and “More
Deals” in grey text in the box to the left:
Immediately above the green Top Position Offer on the
website, is another offer - a higher price in red with a
strike-through. In later versions, the price appeared in red
with no strike-through.
The juxtaposition of the two price offers conveyed the
impression that apart from price, the offers were
The Court found that the price offers were not comparable
because the higher price was for a superior room or room
with superior amenity in the same hotel. The representation
was therefore misleading or deceptive under the Australian
Trivago argued that it had an explanation which was
sufficient to dispel the misleading impression. The
explanation was contained in display text which appeared if
the consumer hovered their mouse cursor over the red
strike-through price. The text included: “the cheapest deal
from the most expensive booking site with offers for this
The Court rejected Trivago’s argument for two reasons.
First, there was no “conventional visual cue, such as a
clear asterisk or footnote” to indicate the existence of the
qualification. Second, the “content of the hover-over text
Trivago discontinued the strike-through price / red price
in the course of the legal proceedings.
3. Top Position Representation
Apart from its position, the formatting of the Top
Position Offer on the Landing Page gave the impression that
it was either the cheapest available offer or had some other
characteristic which made it more attractive than any other
The formatting was that the offer had a green colour
(suggesting positive associations), it was in a relatively
large font, had white space around it and had a large green
“View Deal” button below it (see image above).
The Court found that the impression given by the
formatting was misleading because the Top Position Offer was
not the cheapest available offer (or was otherwise
attractive). Trivago gave the Top Position Offer to the
hotel with the highest ‘pay per click’ bid on most
Trivago relied upon the disclosure in the text displayed
when the mouse hovered over the Our Recommendations button.
The text was:
“In determining the price to display in the leading
position of our search results, we consider a variety of
factors, including price, the likelihood that you will find
your ideal hotel, your ability to complete a booking after
you click on a search result and the level of compensation
provided by the booking sites we cover. In order to make
more information available on pricing options to our users,
additional prices are listed in the “More deals” slide-out.”
The Court rejected this argument because it was not
obvious to consumers that the Top Position Offer was
qualified, and the information in the hover-over was too
4. Additional conduct allegations
Taken together, the Cheapest Price Representation, the
Strike-Through Price Representation and the Top Price
Representation led “consumers to believe that the Trivago
website provided an impartial, objective and transparent
price comparison which would enable them to quickly and
easily identify the cheapest available offer for a
particular (or the exact same) room at a particular hotel”.
Having found that the three representations were
misleading, the Court found the additional conduct
allegations were also misleading in contravention of the
Australian Consumer Law.
Trivago has been modifying its website since it first
became aware of the ACCC’s concerns. It has removed the
obvious contraventions: the strike-though price, the words
“best price” and has made the content more transparent. It
has ceased television advertising.
These modifications will be taken into account when the
case returns to the primary judge to make declarations,
injunctions and order penalties and costs against Trivago.
But will these modifications be enough? Will the Court
make declarations and injunctions so wide as to render the
Trivago online business model no longer viable? Only time