In 2020, Trivago was found guilty of misleading customers by claiming to provide them the cheapest rates when, in fact, it rated hotels based on whose marketers paid the greatest per-click cost.
From late 2013 to mid-2018, the false statements were repeated over 400,000 times in advertising and on the company’s own website.
Justice Mark Moshinsky of the Federal Court of Australia ruled on Friday that Trivago’s illegal behavior cost Australian users $30 million and was intentional rather than accidental.
“There is no evidence that Trivago paid compensation or made any other sort of remedy to impacted customers,” said Justice Moshinky.
Trivago’s violations have resulted in a loss or damage to Australian customers in the amount of $30 million, with no remedy in sight. This, in my opinion, necessitates a significant penalty.”
The judge also stated that, while the fine was several times Trivago’s profit from the behavior, it was required for both specific and general deterrence.
“A complete punishment of the type suggested by Trivago would not represent the seriousness of the violations and would be viewed as a ‘acceptable cost of doing business,'” stated Justice Moshinky.
Trivago’s lawyers had previously argued that a fine of $15 million would suffice, although the ACCC wanted the travel business punished $90 million.
Trivago’s behaviour was serious and far-reaching, according to Tim Begbie QC, who represented the consumer watchdog in court in October last year.
He claimed that the weighting of search results based on how much Trivago was paid was at the heart of its business strategy, and that it provided a service it did not.
Mr Begbie stated, “What Trivago provided to consumers was practically the polar opposite of what it claimed.”
The court was told that there were 213 million hotel room searches on the Trivago site over a period of around 13 months, which was less than half of the time the corporation misled people.