Italy's Antitrust Authority has imposed a €500,000 (US$609,000) fine on TripAdvisor, the travel planning website, following complaints of unfair business practices by a national hoteliers' association and a consumer protection organization.
The fine, announced by the authority, AGCM, on Monday, applies to TripAdvisor LLC, a US company, and its Italian affiliate TripAdvisor Italy Srl. The companies have been given 30 days to make the payment and 90 days to inform the Authority of the steps taken to correct the unfair practices.
TripAdvisor advertised its services using publicity that stressed "the authentic and genuine character of its reviews, leading consumers to believe that the information was always reliable, being the expression of real tourist experiences," the authority said in a statement published on its website.
TripAdvisor's behavior was liable to lead a vast number of consumers into error, the authority said.
TripAdvisor's efforts to monitor its reviewers were not sufficient to determine whether the content of reviews was genuine and whether they provided a reliable judgment on the structures under examination, it said.
"The human resources devoted to monitoring reviews are very limited," AGCM said. "The investigating group for Europe is made up of five employees, of whom only one understands Italian."
The website has been criticized for the ease with which users can register and for the fact that it allows anonymous reviewers to hide behind nicknames. The reliability of its service was also undermined when critics posted a review of a hotel in Sardinia that closed last year.
TripAdvisor said the Antitrust's conclusions were unreasonable and it intended to appeal against the fine.
"The zero tolerance policy of the Antitrust Authority means that it would have found us guilty if just one review in a million was considered inaccurate. A standard has been adopted that is unrealistic for any business model," the company said in a statement.
TripAdvisor used automated monitoring systems similar to those adopted by the financial industry and employed a team of 250 content monitors working 24/7 to ensure the reliability of the reviews, the company said.
The authority had launched its investigation at the request of a business association, rather than consumers, and almost no consumer complaints had come to light, TripAdvisor said. A 2014 survey found 98 percent of Italian users found TripAdvisor's reviews corresponded with their own subsequent experiences, it said.
The Federalberghi hoteliers' association, which complained to AGCM together with the National Consumers' Union, welcomed the verdict, saying users had a right to be sure that the reviews they read online corresponded to the views of real people.
"This is not the first time that TripAdvisor has been called to order by the authorities responsible for market oversight," Federalberghi Director General Alessandro Nucara said in a statement. Britain's Advertising Standards Authority had forced TripAdvisor to remove claims that all its reviews were genuine and reliable in 2012, and in 2011 French authorities had imposed a 430,000 euros fine on TripAdvisor, together with Expedia and hotels.com, for deceitful practices, Nucara said.
Massimiliano Dona, Secretary General of the National Consumers' Union, said TripAdvisor was "a marvellous idea" but was being distorted in practice. "This fine is an historic result, because the reliability of the reviews is fundamental, both for the protection of consumers and for the credibility of the hoteliers," Dona said.
Italians are enthusiastic users of TripAdvisor, posting the most reviews after the U.S. and Britain. Last month the company identified Rita Gavagnin, a 50-year-old office-worker from Trieste, as its most prolific reviewer, with 7,928 contributions to the website. TripAdvisor said it had 315 million unique visitors per month to its Italian website and 190 million reviews posted by Italian users.
"We firmly believe that TripAdvisor represents a positive force, both for consumers and for the hospitality industry," TripAdvisor said in its statement.