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Travel Amp Leisure
Italy fines TripAdvisor over false reviews
From the Financial Times of Tue, 23 Dec 2014 09:10:47 GMT
The TripAdvisor Inc. app logo is displayed on an Apple Inc. iPad in Des Plaines, Illinois, U.S., on Tuesday, Feb. 5, 2013. TripAdvisor Inc. is scheduled to release earnings data on Feb. 13. Photographer: Tim Boyle/Bloomberg©Bloomberg

Italy’s antitrust authority has slapped a €500,000 fine on TripAdvisor for failing to do enough to prevent false reviews.

The move follows complaints from hoteliers of negative and, in some cases, defamatory reviews regarding their businesses. Italy is the world’s fifth largest destination for international tourism, with about 46m visitors in 2013.

The regulator said TripAdvisor, whose website allows readers to leave reviews of restaurants and hotels around the world, should stop “publishing misleading information about the sources of its reviews”, adding that the practice started in 2011. It gave the company 90 days to respond.

Nasdaq-listed TripAdvisor disputed the decision and vowed to appeal the ruling. It said it was a “force for good” and its systems were “extremely effective in protecting consumers from the small minority of people who try to cheat our system”.

But the decision was welcomed by Italian hoteliers.

“We are happy with the decision by the antitrust authority, which goes in the right direction to offer greater protection for consumers and businesses,” said Alessandro Nicara, director-general of Federalberghi, the trade association for Italy’s hotel owners.

TripAdvisor, which makes its revenues from click-based and display advertising and subscriptions, has faced a number of claims from around the world about fake reviews over recent years.

In 2012, the UK Advertising Standards Authority ruled it could no longer claim to say all its reviews were genuine.

TripAdvisor is the latest travel website to find itself in trouble with regulators. Online travel agent earlier this month offered to scrap a practice preventing hotels from giving discounts to its rivals in a bid to appease competition authorities in France, Sweden and Italy.

In the third quarter TripAdvisor disappointed expectations, recording profit of $54m compared with $68m for the same period a year ago. Sales climbed 39 per cent to $354m.

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