A crackdown on misleading price claims spruiked by travel website Trivago should serve as a warning to similar companies, Australia's consumer watchdog says.
The Australian Competition and Consumer Commission wants multi-million dollar penalties imposed on Trivago after a Federal Court judge ruled it misled consumers about cheap hotel deals on its website and in advertising.
ACCC boss Rod Sims said he wanted to make an example out of Trivago's "outrageous behaviour".
"We want to send a message to Trivago and others not to mislead consumers and not to have consumers paying more than they need to be," Mr Sims told reporters on Tuesday.
The ACCC would push for Trivago to face penalties "in the millions" of dollars, he said.
"We want these to be penalties that the company sits up and takes notice of."
Trivago didn't show customers the cheapest deals for hotel rooms but promoted advertisers who paid them the biggest fees, the Federal Court found on Monday.
"Contrary to the impression created by the relevant conduct, the Trivago website did not provide an impartial, objective and transparent price comparison service," Federal Court Justice Mark Moshinsky said on Monday.
"The fact that Trivago was being paid by the online booking sites was not made clear," he wrote in his judgment.
The company was also found guilty of false and misleading price comparisons because it compared a standard room rate with a luxury room at the same hotel.
The ACCC took the company to court last August after a hotel owner alerted them to misleading information on the Trivago website.
"A hotel owner saw what was happening and let us know. They knew that the prices weren't the best prices and they put us on to this," Mr Sims said.
Trivago's misleading claims were aired more than 400,000 times from late 2013 to mid-2018.
The matter will return to the Federal Court for case management at a date yet to be set.
Australian Associated Press