Put simply, Trivago is an online tool to be used by prospective travellers to compare prices on hotel rooms. The website functions like a search engine, whereby a consumer enters the city they wish to travel to, along with the date ranges they are travelling and the type of room they are seeking, and the Trivago website returns a series of results showing different hotels, a star rating, and reviews for each of those hotels. This itself is nothing unique, however where Trivago distinguishes itself from online booking sites is that it aggregates prices from multiple other providers to allow the user to compare prices and pick the best deal for the hotel room.
By way of example, in the judgment of Moshinsky J of the Federal Court of Australia, his Honour includes a number of typical screenshots of Trivago's website, including the following:
The way Trivago displays its results has slightly changed (including that the red text is no longer struck-through), however, for present purposes this is a typical example of Trivago's results that the Court considered.
In the left column, we can see the hotel details, location, and review score. In the middle column, we see a list of deals for what can be reasonably inferred to be the same room. Then in the final column on the right, we can see a prominent price in red and in strike-through text, and another prominent price below it in green for a specific online booking service. This column on the right is described as the "Top Position" offer.
Trivago's business model is one where it generates revenue from the hotels or online booking sites in exchange for "clicks" through to their website. Trivago gets paid irrespective of whether the consumer purchases a hotel room or not. Online booking sites essentially pay a cost per click (CPC) to Trivago.
Each booking website enters a CPC "bid" to Trivago to have their website listed. If their website does not meet a minimum threshold (which Trivago does not disclose to the website), then their offers are not listed. The CPC threshold can also vary between online booking sites. So, it is possible for an online booking site to have the cheapest rate available for a given room, and put in a bid to Trivago, but because it did not bid highly enough it is not listed (in the Top Position or otherwise).
As to what offer makes it into the Top Position, one would think that Trivago is listing the cheapest price. However, expert evidence was adduced as to the process. The upshot is that price is a factor that the algorithm takes into account, however, a "very significant factor" is the CPC amount. That is, how much the online booking site is bidding per click to have their deal displayed. The court accepted expert evidence that at least 66% of the time, the price in the Top Position offer was not the best price.
In relation to each of the three representations, the Court made the following findings:
Time will tell how high the penalty will be from the Court, and whether this result leads to a change in consumer perception of Trivago in Australia.