Online travel companies are on notice that they are subject to Australian law after a man successfully sued global travel giant Expedia, a consumer law expert said Tuesday.
A tribunal ordered Expedia pay Canberra man Hugh Selby more than $600 in damages after its Wotif website misled him when he booked two nights at the Rocky Point Beachfront/Paradise in Haleiwa, Hawaii.
He and his wife had paid for what appeared to be a neat beachside shack with stunning views of the ocean.
However, when they arrived to check in for their holiday in April this year the couple found their $300-per-night room was actually in the basement of a deteriorating property.
The ACT Civil and Administrative Tribunal found Wotif had engaged in misleading and deceptive conduct in breach of the Australian Consumer Law, as the website had proclaimed it had “heaps of local knowledge” and that you could “book with confidence”, and that proved not to be true.
"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 senior member Jann Lennard said.
The decision was a reminder to the Expedias of the world that they needed to be careful, University of Canberra consumer law expert Dr Bruce Baer Arnold said.
He said the idea that cyberspace was a regime free from law 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.”
The Australian Competition and Consumer Commission might also be prompted to issue a warning to both consumers and online services to be careful, he said.
He said the consumer watchdog could also decide to take the site to court over its conduct.
In August, the ACCC announced it was taking hotel comparison site Trivago - owned by Expedia - to the Federal Court, alleging it made misleading price representations in TV and online advertisements.
Chairman Rod Sims said the case highlighted growing concerns the ACCC had about comparison platforms.
The ACCC was concerned websites such as Trivago gave the impression they were designed to benefit consumers when in fact listings were based "on which supplier pays them the most money", he said.
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 - a sales pitch.
Dr Arnold said the arguments the company ran at the hearing were ludicrous, and the arguments about puffery had law 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.
He gave the example of cosmetics advertising that promised youth.
"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.
He said he expected the Expedias of the world to change their messaging in the wake of the case.