ACCC v Trivago

Australian Competition and Consumer Commission v Trivago N.V. [2020] FCA 16 is a Federal Court decision about misleading price comparison claims on a hotel comparison website and in television advertising. The Court examined what Trivago's website and ads conveyed to ordinary consumers, especially the message created by the highlighted Top Position Offer, the use of strike-through and red prices, and statements about finding the best price.

The judgment states, in summary, that Trivago made each of the alleged Cheapest Price, Top Position, Strike-Through and Red Price representations during the periods alleged by the ACCC. It also states that Trivago engaged in broader conduct up to 2 July 2018 that led consumers to believe the website provided an impartial, objective and transparent price comparison that would enable them to quickly and easily identify the cheapest available offer for a particular or the exact same room at a particular hotel.

For businesses, this is an important case about digital design and monetisation. It shows that a ranking algorithm, a highlighted result, a savings display and surrounding marketing can together amount to misleading conduct under the Australian Consumer Law.

Trivago operated a hotel search and comparison platform for Australian consumers. A user could search for accommodation by city, region or hotel, choose dates and room type, and then see a list of hotel listings. Each listing showed several offers from online booking sites and sometimes the hotel itself. One offer was given special prominence in green text, in a relatively large font, with a green View Deal button. The judgment calls this the Top Position Offer.

Trivago also marketed the service as a way to find the ideal hotel for the best price. The judgment quotes a television advertisement that told viewers Trivago instantly compared prices from over 200 different websites and made it easy to find the ideal hotel for the best price. During the first part of the relevant period, the landing page slogan used the same idea. Later, the slogan changed to wording about finding your ideal hotel and comparing prices from many websites, and then from different websites.

The ACCC said the service did not work in the way consumers were likely to think. A central issue was Trivago's cost per click model. Online booking sites paid Trivago a fee if a consumer clicked on their offer. That fee was payable whether or not a booking was made and was Trivago's principal source of revenue. The ACCC alleged that the Top Position Offer was selected primarily by reference to the CPC Trivago would receive, rather than because it was the cheapest or otherwise the most attractive offer for the consumer.

Trivago disputed that and argued that offer price was a more important factor than CPC in determining the Top Position Offer. Because of that dispute, both sides called computer science experts to analyse the algorithm. The experts agreed on one commercially significant point recorded in the judgment: in approximately 66% of listings, higher priced offers were selected as the Top Position Offer over alternative lower priced offers.

The case was not only about the green highlighted offer. Above the Top Position Offer, Trivago displayed another offer in red. During part of the period it appeared as a red strike-through price. Later it appeared as a red price without the strike-through. The ACCC alleged that these displays represented a comparison between prices for the same room category in the same hotel, when in fact the comparison often involved a more expensive room category than the Top Position Offer.

The Court also had to deal with the fact that the website changed over time. The relevant period ran from 1 December 2016 to 13 September 2019, and the Court divided it into four sub-periods. That matters because the representations and the website features were not identical throughout. The first sub-period ran from 1 December 2016 to 29 April 2018, the second from 29 April 2018 to 20 November 2018, the third from 20 November 2018 to 13 February 2019, and the fourth from 13 February 2019 to 13 September 2019.

There was also a broader allegation about the overall message of the service. The ACCC said that by combining the advertising, the Top Position Offer, the comparison prices and other website features, Trivago led consumers to believe the site provided an impartial, objective and transparent price comparison that would enable them to quickly and easily identify the cheapest available offer for a particular or the exact same room at a particular hotel.

The Court had to decide whether Trivago made the representations alleged by the ACCC and, if so, whether those representations were misleading or deceptive or otherwise contravened the Australian Consumer Law. The judgment identifies four specific representations.

First, the Cheapest Price Representation. This was the representation that the Trivago website would quickly and easily identify the cheapest rates available for a hotel room responding to a consumer's search. This allegation related to the first relevant sub-period.

Second, the Top Position Representation. This was the representation 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. This allegation ran across the whole relevant period.

Third, the Strike-Through Representation. This was the representation that the Strike-Through Price shown above the Top Position Offer was a comparison between prices offered for the same room category in the same hotel. This allegation applied during the first and second sub-periods, and also on the map portion of the website during the third sub-period.

Fourth, the Red Price Representation. This was the representation that the Red Price shown above the Top Position Offer was a comparison between prices offered for the same room category in the same hotel. This allegation applied during the third and fourth sub-periods.

The Court also had to decide the broader additional conduct allegations. These were not limited to one sentence or one label. They concerned whether Trivago's conduct led consumers to believe that the website provided an impartial, objective and transparent price comparison that would enable them to quickly and easily identify the cheapest available offer for a particular or the exact same room at a particular hotel.

Another important issue was how the Top Position algorithm actually worked. The ACCC alleged that Trivago selected the Top Position Offer primarily by reference to the CPC payment it would receive if the consumer clicked on the offer. Trivago denied that and said price was more important. The Court therefore had to assess expert evidence about the algorithm and the practical effect of CPC on which offer was highlighted.

The case also raised a familiar consumer law question in a digital setting: what is the overall impression on the ordinary consumer? The Court's analysis was not confined to whether a statement was literally true in some narrow sense. It looked at the combined effect of slogans, layout, colours, labels, comparison prices, the More Deals function and the prominence of the Top Position Offer.

The Court treated the relevant period as running from 1 December 2016 to 13 September 2019. It then divided that period into four sub-periods because the website changed over time and the allegations had to be assessed against the version of the site consumers actually saw.

The first relevant sub-period was 1 December 2016 to 29 April 2018. The second was 29 April 2018 to 20 November 2018. The third was 20 November 2018 to 13 February 2019. The fourth was 13 February 2019 to 13 September 2019. The judgment refers to the website in these periods as website versions 1, 2, 3 and 4. It also notes that the appearance of the website was not necessarily static within each sub-period and that some changes were made within a sub-period.

That structure matters for two reasons. First, some representations were only alleged in particular periods. The Cheapest Price Representation was tied to the first sub-period. The Strike-Through Representation applied in the first and second sub-periods and on the map portion of the website during the third sub-period. The Red Price Representation applied in the third and fourth sub-periods. The Top Position Representation was alleged across the whole relevant period.

Second, the Court's summary conclusion states that the broader additional conduct allegations were established only up to 2 July 2018, not for the balance of the relevant period. So the timing of website changes mattered to the outcome.

The judgment also identifies some of the changes that occurred over time. For example, the landing page slogan changed. The More Deals button changed from indicating the number of additional offers presented in the slide-out to indicating the lowest offer presented in the More Deals slide-out. Hover-over text was also introduced in parts of the site. The ACCC's pleaded case, as summarised in the judgment, was that some of these changes did not remove the Top Position Representation.

For business owners, this part of the case is especially useful. It shows that legal risk can shift as a product evolves. A business may change wording, add hover text or alter a button, but those changes will only help if they actually change the overall impression on consumers. Product teams should therefore keep records of interface changes and reassess legal risk each time ranking, comparison or savings features are updated.

The judgment contains a summary conclusion at paragraph 15. The Court concluded that Trivago made each of the Cheapest Price Representation, the Top Position Representation, the Strike-Through Representation and the Red Price Representation during the periods alleged by the ACCC.

The Court also concluded that, in making the Cheapest Price Representation, Trivago contravened sections 18 and 34 of the Australian Consumer Law. In making the Top Position Representation, the Strike-Through Representation and the Red Price Representation, Trivago contravened sections 18 and 29 of the Australian Consumer Law.

On the broader additional conduct allegations, the Court concluded that Trivago engaged in that conduct up to 2 July 2018, but it was not established that Trivago engaged in that conduct during the balance of the relevant period. In engaging in that additional conduct up to 2 July 2018, Trivago contravened sections 18 and 34 of the Australian Consumer Law.

The judgment is also clear about some of the factual foundations behind those conclusions. It records that Trivago admitted the part of the ACCC's case based on the Cheapest Price Representation. For part of the relevant period, Trivago also admitted the part of the case based on the Strike-Through Representation. The balance of the case was contested.

The Court further recorded that the experts agreed that in approximately 66% of listings, higher priced offers were selected as the Top Position Offer over alternative lower priced offers. That did not by itself decide every issue, but it was an important factual feature of the case because it went directly to the message consumers were likely to take from the highlighted top result.

The orders published with the judgment did not finally dispose of remedies. They varied earlier confidentiality orders to allow publication of the reasons and listed the matter for a case management hearing. So this judgment is the liability decision. It establishes the contraventions, while later relief was to be dealt with separately.

Businesses should read this case as a decision about interface meaning. The Court looked at what consumers were likely to understand from the website and advertising as a whole. That is important for any business that uses ranking, recommendation or comparison tools. A highlighted result can communicate more than a business intends. If it looks like the cheapest, best or objectively selected option, the business needs a proper basis for that impression.

The case is especially relevant where a platform earns revenue from supplier payments, bids, commissions or referral fees. Those models are common and can be lawful. But if payment materially affects which offer is highlighted, the interface must not still suggest that the result is neutral, impartial or cheapest-first unless that is actually true. The legal risk comes from the mismatch between the commercial mechanics and the consumer-facing message.

The judgment is also a reminder that savings claims need like-for-like comparisons. A strike-through or red comparison price is powerful because it quickly signals value. But if the comparison is between different room categories, or otherwise between unlike offers, the overall message can be misleading even if each individual price exists somewhere in the system.

Another practical point is that disclosures and product tweaks may not be enough if the main impression remains the same. The judgment notes changes such as hover-overs and changes to the More Deals button. Businesses should not assume that adding extra information somewhere on the page will cure a misleading dominant message created by layout, colour and prominence.

Finally, this case shows why legal review should happen at product level, not just in marketing. Engineers, designers, growth teams and commercial managers often control ranking logic, labels, badges, comparison methods and sponsored placement settings. Those decisions can create the same kind of consumer law exposure as a headline advertisement.

If your business runs a comparison or marketplace interface, start with the customer-facing screen. Review what appears first, what is highlighted, what colours are used, what prices are crossed out, and what labels are attached to the most prominent result. Then compare that presentation with the actual ranking logic and commercial arrangements behind it.

Next, review your supplier and platform agreements. If third parties pay cost per click, commissions, bids or other fees, map exactly how those payments affect prominence, eligibility or filtering. The judgment notes that Trivago's contractual terms required online booking sites to pay CPC and that a minimum CPC could affect whether an offer was displayed at all. Those mechanics matter because they can change what consumers are shown and what they are likely to infer.

Review your comparison methodology as well. If you display a strike-through price, a red comparison price, a percentage saving or a top deal badge, make sure the comparison is between equivalent offers. In practice that means checking room category, inclusions, booking conditions and any other feature that would matter to a consumer comparing value.

Also review your disclosures, hover text and explanatory copy. These can help, but only if they genuinely alter the overall impression. If the main screen strongly suggests one message and the explanation is secondary or technical, the explanation may not solve the problem.

Finally, keep a change log. The Trivago case was analysed across four sub-periods because the website evolved. Businesses should be able to identify when a slogan changed, when a ranking rule changed, when a comparison label was introduced, and when a disclosure was added. That record can be critical if the business later needs to explain what consumers saw at a particular time.

The liability judgment was delivered by Moshinsky J in the Federal Court of Australia on 20 January 2020. The hearing took place on 9, 10, 11, 12 and 13 September 2019 in the Victoria Registry.

The relevant period considered by the Court ran from 1 December 2016 to 13 September 2019. The Court divided that period into four sub-periods: 1 December 2016 to 29 April 2018, 29 April 2018 to 20 November 2018, 20 November 2018 to 13 February 2019, and 13 February 2019 to 13 September 2019.

The orders published with the judgment show that the Court varied earlier confidentiality orders to allow publication of the reasons and listed the matter for a case management hearing. This confirms that the published decision is the liability stage and that further procedural steps were to follow.