The Australian Competition Commission (ACCC) is doing a victory dance after the Federal Court ruled against Trivago for misleading consumers about hotel room rates on both its website and television advertisements.

The ACCC says Trivago uses an algorithm that gives preference to booking sites that paid Trivago the highest cost-per-click fee.  By doing that, the regulators say Trivago didn't often present the cheapest rates to consumers.

"Trivago's hotel room rate rankings were based primarily on which online hotel booking sites were willing to pay Trivago the most," said ACCC chair Rod Sims.  "By prominently displaying a hotel offer in 'top position' on its website, Trivago represented that the offer was either the cheapest available offer or had some other extra feature that made it the best offer when this was often not the case."

The ruling also held that Trivago's hotel room rate comparisons that used strike-through prices or highlighted text in different colours gave consumers a false impression that they were making savings because, in reality, Trivago was comparing an offer for a standard room with an offer for a luxury room at the same hotel.

"We brought this case because we consider that Trivago's conduct was particularly egregious," Sims said.

Trivago responded to the court ruling with the statement, "We are disappointed by the action the ACCC has chosen to take in relation to Trivago and will vigorously defend our interests."

Another hearing to determine fines has yet to be scheduled.