Hotel comparison website Trivago breached Australian consumer law by misleading consumers on which hotel deals were best, the Australian Federal Court has found.

In a striking victory for Australia's competition watchdog against the Netherlands-incorporated online giant, the court concluded that Trivago engaged in misleading conduct and made false representations to consumers.

The ACCC had argued Trivago promised customers impartial, objective and transparent hotel price comparisons which would allow them to quickly and easily identify the cheapest offer available. But rather than serving consumers the best deals, the hotel aggregator promoted its best advertisers, the ACCC claimed.

The consumer watchdog took the company to court in August last year over misleading information on the website and television advertising aired more than 400,000 times from late 2013 to mid-2018.