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Trivago defends its best price claim: Best isnt always cheapest, it tells Australian court

STUFF
We used TripAdvisor to book the worst hotel, restaurant and attraction we could find. But was it really that bad?

The "best deal" for a room promoted on Trivago's website is not always the cheapest, the online hotel giant has told Australia's Federal Court.

Trivago revealed how it ranks offers as it began its defence against an Australian Competition and Consumer Commission (ACCC) lawsuit alleging it misled customers by prioritising higher paying advertisers over cheaper deals.

Trivago's lawyers told the Federal Court on Tuesday that its algorithm prioritised the best deal for customers and considered factors beyond price such as the ease of using a booking website and a lack of cancellation fees.

The ACCC on Monday told the court that royalties from advertisers dictated more than 50 per cent of Trivago's algorithm.

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The Australian consumer watchdog has launched proceedings against Trivago.
The Australian consumer watchdog has launched proceedings against Trivago.

​Trivago on Tuesday said advertiser payments were the "fourth or fifth" most important factor, with advertiser royalties - known as "cost-per-click" payments - acting primarily as a "tie breaker" when offers were similarly priced.

Trivago faces a multimillion dollar fine over allegations it deceived customers when it claimed to offer the "best prices" by comparing millions of prices for "the exact same rooms" from December 2016.

The ACCC on Monday told court that Trivago "has not ever, and does not today, in fact enable consumers ... to quickly and easily identify the cheapest prices available for a particular hotel room".

Neil Young, QC, representing Trivago, on Tuesday cited evidence from two independently-commissioned algorithm experts that found the website ordered hotel deals by a "composite score" of attractiveness calculated through multiple "dependent and independent factors".

"The allegation is Trivago selected the top position primarily by cost-per-click ... both experts agree that is not the case," said Young.

"Trivago selected the top position primarily by reference to the value of the offer price."

An example of the Trivago 'strike-through' and red text pricing display that is under scrutiny. The A$420 may have referred to a different room type.
An example of the Trivago 'strike-through' and red text pricing display that is under scrutiny. The A$420 may have referred to a different room type.

 Young produced a mind map of the calculations in Trivago's algorithm, which he said showed "priority cost-per-click" was one of multiple factors.

He did not discuss further details of the map in court due to concerns over sharing confidential coding information.

Justice Mark Moshinsky ordered evidence from the two algorithm experts, Professor David Parkes and Victor Bajanov, be given in closed court over similar concerns.

Norman O'Bryan, SC, representing the ACCC, on Monday criticised Trivago for failing to call upon one of its own algorithm developers to give evidence.

He said the website's algorithm was "the subject of continual intense [internal] scrutiny" and rejected Trivago's "tiebreaker" analogy.

Trivago also contested parts of the ACCC's other main allegation, that its "strike-through" prices of more expensive rival deals in fact compared different room types.

Young said while Trivago accepted its strike-through deals from December 2016 to April 2018 were misleading, it had since removed the strike-through in favour of red text and a disclaimer.

He said the red text, representing a "more expensive" deal, may still compare different room sizes. However he claimed the comparisons were fair when other factors, such as hotel amenities, offers (such as a free breakfast) and cancellation fees were considered.

Young told Justice Moshinsky he would have to decide whether these "micro details" constituted a deception of customers.

Trivago has already admitted some of the ACCC's claims, which carry a fine up to A$1.1 million (NZ$1.2 million) per breach. The case continues.

Sydney Morning Herald

Source : Stuff.co.nz

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