Trivago may have to pay several million dollars in fines after admitting it misled customers with its advertising.
The hotel booking website was accused in August by an Australian authority of breaching the country's consumer laws with allegedly misleading ads said to exaggerate savings and hide the cheapest deals.
Lawyers believe Trivago may have to pay AU$10 million (NZ$10.7 million) or more after admitting to some of the accusations by the Australian Competition and Consumer Commission (ACCC).
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The claims of misleading customers include Trivago leading customers to believe its search results page had the lowest prices, when cheaper options were located in a "more deals" section that wasn't obvious.
Trivago is also said to have compared luxury rooms with standard rooms and guided consumers to hotels that paid them more commission than others or "prioritised advertisers who were willing to pay the highest cost per click fee", said the ACCC in a statement.
"The ads are wonderful - we all love the Trivago girl and she tells us it's the best price. The only problem is, it's not. It's one big lie and they deserve to be punished," reported John Rolfe in the Sunday Telegraph.
"It's been comparing apples with oranges - so it might take a junior suite and compare that with a standard room - and give you a discount when it's not really comparing two rooms that are the same."
In addition to its admission of misconduct, Trivago has updated its website to tell customers that hotels are ranked by "compensation paid by the booking site".
"By displaying the strike-through price next to the top position offer in the form, it was displayed either on its own or in conjunction with the percentage savings box," the company said in a statement.
"Trivago may have caused some consumers to form an erroneous belief that the top position offer and the strike-through price were offers for rooms in the same room category."
The ACCC and Trivago have entered formal mediation and the case is expected to return to court on December 14 in Melbourne.