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Online travel companies have faced intense regulatory scrutiny almost since the first days of internet bookings. But "you've got mail" these days is less likely to be a cheery email notification than a demand for court appearances and audits.

Whether it’s online travel companies like Trivago,, or Airbnb, regulators around the world are lashing out at the business models of these companies and their competitors.

In two recent examples, the Australian Competition Commission disclosed that the country’s federal court found that Germany’s hotel-price comparison business Trivago was displaying hotel rates from the highest bidders in its auctions, and often hiding cheaper rates behind a “more deals from” list in violation of competition law. The court also took issue with the strike-through prices that inflated the discount consumers would receive.

In the UK, starting in September, sister companies, Agoda, and Kayak, as well as some competitors, agreed to take certain steps to settle some of the competition authority’s investigations over “pressure selling,” which includes messaging on’s hotel pages such as “2 other people looked for your dates in the last 10 minutes.”

The Australia Trivago case, which got under way in 2018, puts into focus the practices of numerous metasearch sites around the world. Like Trivago, Google’s hotels feature, for example, has hidden cheaper rates while sometimes placing higher ones in coveted positions on the first screen of a listing.

In metasearch auctions, online travel agencies and hotels bid for positions within a listing. The ranking, whether the bidder is listed first, third, or relegated to a secondary page, can have a huge impact on whether consumers click, and eventually make a hotel booking.

As regulators have pointed out, metasearch companies — and online travel agencies — have been less than forthcoming about precisely how they rank listings, and sort bidders within listings.

This new scrutiny may reveal more of that process.

Messaging on Trivago now explains how payments from online travel agency and hotel advertisers impact placement within listings, although it’s still vague: “The ranking results reflect your search criteria and our assessment of the attractiveness of the offer compared to other offers available on our site. It also reflects the compensation paid by the booking site.”

Why did Australian authorities go after Trivago in particular?

“We brought this case because we consider that Trivago’s conduct was particularly egregious,” said Australian Competition Commission chair Rod Sims in a statement. “Many consumers may have been tricked by these price displays into thinking they were getting great discounts. In fact, Trivago wasn’t comparing apples with apples when it came to room type for these room rate comparisons.”

The court has not yet meted out penalties to Trivago. In a statement, Trivago said:

“The judgment received from the court provides new guidance on how results of comparator websites, like Trivago and others, should be displayed in Australia. Trivago will closely review the decision. We are working to quickly understand the implications of this decision on our website design and its overall impact on the Australian travel industry and the way websites are to be designed in Australia. We will continue helping millions of Australians research and find great accommodation deals and look forward to continuing to help our customers find their ideal hotel.”

In the UK case against Booking Holdings and other online travel sellers, the online travel company agreed to show “prices inclusive of all mandatory taxes and charges, providing information about the effect of money earned on search result rankings on or before the search results page and making certain adjustments to how discounts and statements concerning popularity or availability are shown to consumers.”

The agreement, according to Booking Holdings, applies to all players in UK online travel; there was no admission of wrongdoing.

What UK authorities termed pressure selling has been a staple of messaging — and it was adapted by rivals around the world — for more than a decade. It is one of the tricks in the company’s arsenal to spur indecisive travelers to book a room. In its test and learn environment, tested these sorts of messages on its websites, and some of them obviously worked.

On the short-term rental front, Airbnb, Expedia, and, among many others, have faced opposition of regulators around the world, although they have lately been making headway in various jurisdictions. Of course it isn’t just regulators who are part of the action. In Jersey City, New Jersey in the U.S. recently, voters opted to adopt tougher regulation of Airbnb.

Nothing New?

The scrutiny has been intense over the last 20 years as online travel companies find themselves subject to regulatory glare, at both local, country, state, and national levels whether it’s in short-term rentals, occupancy tax bills, or antitrust matters.

In Europe,, Expedia Group, and HRS have been under pressure to modify rate parity agreements. They traditionally meant that if Accor gave a $120 net rate for a property and guaranteed a certain degree of availability, then would require the hotel to at least provide the online travel company with the same deal, not worse. That paradigm in some jurisdictions has loosened up.

Similar rate parity probes have been launched in countries such as Australia and Brazil, for example.

On other fronts, Swiss authorities are currently engaged in a probe of’s commission levels, and Turkish authorities are challenging the company’s efforts to sell Turkish accommodations to the country’s residents.


Among other tax issues in Europe, in July France leveled a 3 percent digital services tax against online players that is retroactive to January 1, 2019. Booking Holdings, for example, said its liability was $29 million for the first nine months of last year.

Expedia Group is facing various probes in Europe over its VAT (value-added tax) responsibilities.

In the United States, online travel agencies, including Expedia,, Priceline, and many others, have been fighting hotel tax liability lawsuits for more than 15 years.  In general, cities, counties, and states have claimed that the online travel agencies were illegally remitting taxes on the net rates they received from hotels under the merchant model instead of the full retail rate they charged consumers. The online travel agencies countered that most of the tax laws in questions applied to hotel operators, not the intermediaries.

In November, Expedia Group tallied that cities, counties and states had filed 101 lawsuits against it since 2004, and 11 were still active. Forty-seven of these lawsuits were dismissed. Of these, some allowed the plaintiffs to pursue administrative remedies while 33 were thrown out because courts ruled that the defendants were not subject to the tax, or the plaintiffs lacked standing to sue. As of September 30, Expedia Group had a reserve of $66 million for potential settlements of occupancy tax litigation, audits, and other tax-related issues.

To date, online travel companies have been able to cope with regulatory decisions to various degrees. If in 2004, when the City of Los Angeles sued Expedia, Travelocity, and Priceline over hotel occupancy taxes, and it appeared that the essence  of their merchant model hotel business was under duress as other cities did likewise, it didn’t turn out that way at all.

Airbnb may be reeling from near-bans in places like New York City, which was once among its largest markets, but it is expanding elsewhere and launching new business segments.

As with the new digital services tax in France, the question becomes how much hurt will online travel companies be able to cope with in the name of consumer and governmental protections — which are many times justified — and when will these rulings bring some of the companies to their knees.

Update: This story has been updated to include a comment from Trivago about the Australia court ruling.”

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Tags: airbnb, antitrust,, competition, expedia, online travel, regulations, trivago

Photo credit: trivago Campus 2018: Facade with Hotel Search Logo The facade and logo outside Trivago An Australia court chastised Trivago about the way it displays hotel discounts. Pictured is Trivago Germany headquarters as seen in 2018. Trivago

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