Commission feels heat over Trivago prosecution

Pressure is mounting on the NZ Commerce Commission over its failure to take action against Trivago.

The German-based hotel comparison giant owned by Expedia was earlier this month ruled by the Australian Competition and Consumer Commission (ACCC) to have engaged in misleading conduct and made false representations to consumers.

It now faces a multi-million-dollar fine under Australian Consumer Law.

Consumer NZ is leading calls for the Commerce Commission to similarly move against the company, following the ACCC’s victory in the Australian Federal Court.

Head of research Jessica Wilson told Stuff the organisation wants the commission to investigate Trivago and other online booking agents over their advertising practices and will push for legal action if any are found to be in breach of the Fair Trading Act.

“We would like action taken here,” she said.

In 2018 Consumer NZ surveyed Trivago’s accommodation recommendations over a three-week period and found half the time the ‘deal’ Trivago highlighted was more expensive than the cheapest option displayed less obviously on the site. In one case the difference equated to $63 a night.

“We think most customers will assume that by “best price” Trivago means the cheapest price, which we’ve found isn’t the case,” a spokesperson said at the time.

Consumer NZ sent the commission its findings and asked it to investigate, but while the commission did look at Trivago’s pricing “in relation to additional taxes and tariffs”, it decided not to take enforcement action.

The consumer watchdog has since revealed that it has received 18 complaints about Trivago from disgruntled consumers over a five-year period, starting from January 2015.

The commission says there is no current investigation into Trivago’s practices in New Zealand, but it will continue its communication with the ACCC to ensure changes to the company’s practices in Australia are replicated in New Zealand.

But Julie Wilson argues it is becoming increasingly difficult for consumers to know whether they are getting a “legit” deal on accom booking sites and says Consumer NZ “considers there to be grounds for court proceedings”.

It is a position supported by Hospitality NZ chief executive Julie White, who argues operators feel they have lost control of their room rates and revenues.

We will be seeking feedback from the Commerce Commission if their position not to investigate has changed off the back of ACCC’s decision,” White says.

“Hospitality New Zealand…hopes that this message is clearly received by other online providers that it is not acceptable to mislead consumers and exploit accommodation providers.”

While acknowledging online platforms are an “important distribution channel” for accom, White says: “Customer behaviour has been influenced by online booking companies investing substantial amounts of money attracting customers to their websites – creating an OTA bias that the best deals are online, which is clearly not the case..

“We would like to see a more transparent and fair playing field in New Zealand.”

Australian operators have greeted the ACCC decision with relief and jubilation, one AccomNews subscriber saying: “Get onto these overseas SHONKS. Lets give the little family motel a go, our adverts are buried 3 – 4 pages into a look up (sic).”

Another commented: “Lets hope ACCC get really stuck into the anti-competitive and downright dishonest practices of OTAs and that the ‘book direct’ message will permeate to the general population.”

NZ commerce and consumer affairs minister Kris Faafoi says while misleading behaviour is concerning, he will leave the commission to act as it sees fit.

“The Commerce Commission is an independent regulator and it wouldn’t be appropriate for me to direct them to take enforcement action in respect of any particular business,” he told Stuff.


Kate Jackson

Kate Jackson is the editor of Accomnews. You can reach her at any time with questions or submissions:

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One Comment

  1. These OTA businesses would disappear if the industy was united and brave enough to shut them out. Without inventory they would not exist. They are hurting most in tradtioial accommdation at a time when the industry is also under attack from airbnb types.( and that is another story about an unlevel playing surface).. Every year they are tightening their grip and pushing to keep the direct sale option off the table with some serous spending and clever marketing on google. How may times do Guests comment that they thought they were being directed to your website but end up on a ota . The OTA’s hope that accommodation providers can not afford not to be on their sites and to date they have been very successful. There are a number of ways these companies can be thawted if the industry starts taking back control.

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