Crackdown on comparison websites serves wake-up call for all advertisers

The ACCC’s case against Trivago for making misleading claims to consumers, coupled with tougher penalties for brands found breaching Australian Consumer Law, should be stern reminders of the importance of auditing advertising through the consumer’s eyes.

That’s the view of Plexus senior solicitor, Sharmila Pamamull, who caught up with CMO following last week’s judgment against travel comparisons website, Trivago, for breaching Australian Consumer Law. The website was found to have made misleading representations to consumers about hotels featured on its website and television advertising for nearly three years by favouring those that paid the highest cost-per-click.

Plexus specialises in marketing compliance with legal expertise around advertising and trade promotion law.

It advises companies such as Coca-Cola and L'Oréal on marketing and advertising collateral, trade promotions, permits and intellectual property. Commenting on the Trivago case, Pamamull said a key issue was the brand advertising a pricing discount that didn’t actually exist.

“Brands need to be careful in the way they advertise to consumers so they aren’t implying consumers are obtaining better deals than what is on offer,” Pamamull said. “One issue was Trivago was promoting these offers as the top offer on its website. When you’re doing that, you’re implying consumers are obtaining a better offer through one of those deals. In fact, that deal positioning was due to how much money Trivago was obtaining from other companies.

“If someone is ranking offers on a website based on money they are obtaining, it should be made clear to consumers. Whether or not it’s a sponsored ad, or advertised post, it’s very important to communicate that. You can’t just have a top offer without outlining the conditions behind it.”