From where I sit (OK I’m not that objective being a lawyer with some experience in the area of competition law but….), I continue to be astounded by the missteps some otherwise fabulous, and to be fair, some not so fabulous travel businesses make which continue to get them in trouble with the Australian Consumer and Competition Commission (“ACCC”). I might add, there are many that are lucky they haven’t yet been in said trouble (pick up a Sunday paper some time and glance through some of the package deal ads, note the asterisks ** and I defy you to be confident you know what you will have to budget in total for your “all inclusive”, “no more to pay”, “all food and drinks” package). Ensuring fair and reasonable dealings with consumers, not misleading customers via site copy or ads, price transparency, should, by now, be bread and butter core issues for any online travel related business in our region (even given the low touch regulatory environment in some parts of APAC).
Trivago, the well known hotel content aggregator, is currently defending itself in the Federal Court in Australia against ACCC allegations that it has published misleading advertisements and misled its customers more generally, via TV ads, copy on its websites, search results on its website and more. In a nutshell the allegations include that they repeatedly (i.e. publicly thousands of times and on their site) represented that they had the “best price” and were an “impartial price comparison service that would help identify the cheapest hotel prices” when the ACCC alleges Trivago’s site “prioritised advertisers who were willing to pay the highest cost per click fee to Trivago”. If the ACCC is right and can prove it, this would be a pretty open and shut breach of Australian law and given the breadth of Trivago’s advertising in the period in question, penalties could be significant.
Let me wind this back a bit for context. The key provision in legislation in Australian law is Section 18 of the Australian Consumer Law (for anyone older than 27ish this was the glorious law-evolving / exam question answering catch all……. section 52 of the Trade Practices Act 1975 (Cth)):
“A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”
Practically this clause means online travel platforms need to ensure their marketing, advertising and booking procedures and terms are clear, unambiguous and don’t make claims that can’t be backed up (again for those with long memories remember the ACCC putting an expensive stop to Flight Centre using their “Lowest Airfares Guaranteed” slogan).
There are lots of other compliance issues with website copy, pricing and so on but not being misleading and deceptive has to be the most basic and fundamental you might think. However in some circumstances there can be a fine line between clever, catchy marketing (known as advertising puffs because they are so clearly promotional and aren’t coupled with other misleading techniques - i.e. no one reasonable believes them to be true - e.g. “the world’s best pie shop!”) which is permitted, and breaching these laws. It gets even harder these days as the way you “search and shop” online and what results are presented to you, the user, can be influenced by any number of automatic algorithms, meta-data, analytics, cookie data (i.e. interacting software programs) and so on, that it is far from as straight forward as what the ACCC wants to see - i.e. if you say you will serve up the cheapest price based on the search, you better do that, literally... The ACCC has said that…. “We are very concerned that such platforms convey an impression that their services are designed to benefit consumers, when in fact listings are based on which supplier pays the most to the platform”. That might turn out to be a bit of a black and white statement when things are somewhat grayer I suspect given all the sorts of processes I mention above (and assuming Trivago’s model is to control the content on its sites, not like the “passive” sponsor links on google which google was found by the High Court not to control (google Inc v ACCC) and therefore not to have misled. We shall see what the evidence reveals if things go that far in court. Trivago could have avoided this easily though in my view with more careful copy and more measured ads.
The duty to not mislead or deceive means the copy and processes (what prices are served up when, what is said when etc) inherent in an online booking journey need to be carefully reviewed for compliance, as do all ads and promotions. I continue to see extra costs appearing at the last or penultimate page in a booking process (BREACH) and as I mentioned earlier I continue to see misleading advertising posted across all media (BREACH). Bait advertising is particularly prevalent - i.e. when an item is advertised at a sale price but the seller does not have sufficient stock to last until the end of the sale (BREACH).
My advice is that if you engage in online selling/promotions/advertising you need to have someone responsible for what is published/posted who understands this legal “stuff” (or seek assistance, get trained up quickly). It’s not set and forget on any of this either, no site or advertising is set in stone, it’s an ongoing core part of business in this sector, whether you are a small operator or a global giant, the legal requirements in this area are the same.
JASON MCLENNAN
