Expedia has been ordered to pay Canberra man Hugh Selby more than $600 in damages after its Wotif website misled him over accommodation at Rocky Point Beachfront/Paradise in Hawaii.
Mr Selby and his wife paid for two nights at what appeared to be a tidy beach-side shack with views of the ocean. On arrival, they found their $300-a-night accommodation was decrepit.
The ACT Civil and Administrative Tribunal found Wotif had engaged in misleading and deceptive conduct, in breach of Australian Consumer Law, because the website claimed it possessed “heaps of local knowledge” and that you could “book with confidence”.
“The accommodation was, as a matter of fact, not as described on the website but in a dilapidated and run-down condition, and with no sea views,” tribunal member Jann Lennard said.
University of Canberra consumer law expert Dr Bruce Baer Arnold told the Canberra Times the idea that the internet was free from legal restrictions or only subject to US law was nonsense.
“You are covered by Australian law and you need to be careful about what claims you make,” he said.
“What we’re seeing increasingly is individual countries asserting their law in relation to their citizens [and] activity that takes place within their jurisdiction, and they’re asserting it fairly effectively.”
Dr Arnold said Mr Selby’s case could prompt copycat litigation by other consumers seeking a fix that “yes you’re right, you were misled, and therefore the Australian Consumer Law will come to the rescue.”
Expedia, in its defence against Mr Selby’s suit, said it was not liable for the nature of the advertisement or the quality of the accommodation and it pointed to exclusion clauses also published on the website.
It also argued the statements were just “puffery” – merely a sales pitch.
Dr Arnold told Fairfax Media the arguments were ludicrous, and the puffery defence had fellow academics “rolling on the floor”.
Puffery, he said, was a recognised legal concept which referred to the making of an exaggerated statement but with recognition that no reasonable person would take it at face value.
“What we have with this travel site is, this is not puffery, the whole reason that you go to the travel site is to get information on which you would rely,” Dr Arnold said.
The Australian Competition and Consumer Commission is likely to view the case with interest in the light of its current pursuit of hotel comparison site Trivago – also owned by Expedia – over alleged misleading TV advertisements.
Chairman Rod Sims has said the case highlights the ACCC’s growing concerns over comparison platforms.
Mr Sims faces significant industry pressure to legislate over the rate parity clauses imposed by online travel agents on accom providers, with Accommodation Association of Australia chief Richard Munro this week signalling the association will bypass the ACCC in search of government action if the organisation fails to act soon.