If you sell to customers online, run a subscription or membership service, or advertise prices on a website or social media, a major change to Australian consumer law is heading your way. On 1 July 2026, Federal Parliament passed the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 (Cth), amending the Australian Consumer Law (ACL) in Schedule 2 of the Competition and Consumer Act 2010 (Cth). The new regime takes effect on 1 July 2027, giving businesses just under a year to get their house in order.
This guide explains what the reform does, why the existing law was considered inadequate, what recent court decisions tell us about the regulator's priorities, and the practical steps small and medium sized businesses should take now.
Why Reform? The Gap in the Existing Law
For decades, the ACL has policed business conduct through three main tools:
- the prohibition on misleading or deceptive conduct (s 18)
- the prohibition on unconscionable conduct (ss 20 to 22); and
- the unfair contract terms regime (ss 23 to 28)
These provisions are powerful, but each has limits.
Section 18 requires conduct that misleads or is likely to mislead. A business that tells no lies but designs its website so that cancelling a subscription takes eleven clicks while signing up takes one may not "mislead" anyone in the legal sense. Unconscionable conduct under ss 20 to 22 sets a high bar: even after the Full Federal Court confirmed in ACCC v Quantum Housing Group Pty Ltd [2021] FCAFC 40 that statutory unconscionability does not require exploiting a "special disadvantage", courts still demand conduct that is a serious departure from acceptable commercial norms. And the unfair contract terms regime only addresses what is written in a standard form contract, not the sales tactics used to get a customer to sign it.
The new law is designed to fill that gap. Practices sometimes called "dark patterns", such as design tricks, hidden fees, needless friction, and confusion based selling, can slip through the existing prohibitions while still causing real harm. The reform has been a long time coming: Commonwealth, State and Territory Consumer Affairs Ministers agreed to explore unfair trading practice prohibitions in late 2020, Treasury consulted on the problem through 2022 and 2023, and the government confirmed its intention to legislate in a Decision Regulation Impact Statement released in December 2025. An exposure draft followed on 9 February 2026 (with consultation closing on 23 February 2026), and the Bill was introduced into Parliament in April 2026 before passing on 1 July 2026.
What the New Law Prohibits
The reform has three main components.
A general prohibition on unfair trading practices
The centrepiece is a broad, principles based ban with a two limb test. A business contravenes the prohibition where its conduct:
- unreasonably manipulates the consumer, or unreasonably distorts the environment in which the consumer makes (or is likely to make) a decision; and
- causes, or is likely to cause, detriment to the consumer, whether financial or otherwise
Both limbs must be satisfied. This is deliberately wider than misleading conduct: a practice can be entirely truthful and still be "unfair" if it exploits confusion, pressure, or exhaustion.
Contraventions attract the ACL's maximum penalties, which for companies can reach the greater of $50 million, three times the benefit obtained, or 30% of adjusted turnover during the breach period. As enacted, the general prohibition protects individual consumers who are not carrying on a business, though as discussed below that scope may soon widen.
A crackdown on "drip pricing"
Drip pricing is advertising a headline price and then progressively adding compulsory fees during checkout, so the final price is meaningfully higher than the one that attracted the customer. The new law strengthens disclosure obligations around transaction based charges: mandatory and unavoidable fees must be included in the total price displayed upfront.
New subscription contract requirements
Businesses running subscription models will face specific obligations, including:
- disclosing the key terms of the contract clearly at the point of entry
- sending reminders at key points, such as before automatic renewals or the end of a free or discounted trial; and
- simplifying cancellation processes so that leaving is not materially harder than joining
If cancelling is dramatically harder than signing up, that is exactly the "subscription trap" the legislation targets.
Importantly, enforcement will not be limited to the ACCC. Individuals and businesses who suffer loss because of an unfair trading practice will be able to bring their own proceedings for damages and injunctions.
The Cases Show Where This Is Heading
The reform did not come out of nowhere. Recent enforcement action shows the regulator has been straining the existing law to reach this conduct, and the courts have been receptive. The ACCC has also named manipulative and false practices in digital markets among its 2026-27 enforcement and compliance priorities, and has pursued subscription and pricing conduct against businesses including HelloFresh, Youfoodz and EconomyBookings alongside the matters below.
ACCC v Webjet (2025)
In September 2025, the Federal Court ordered online travel agent Webjet to pay a $9 million penalty for advertising airfares that excluded compulsory service and booking fees, and for sending false booking confirmations. The fees were mentioned only behind an asterisk or late in the checkout process, which the Court found insufficient to neutralise the misleading effect of the headline prices. The decision confirms that hiding unavoidable fees at checkout is already legally risky, and it will only become more so under the new regime.
Dendy Cinemas (2025)
Even small scale drip pricing attracts attention. Dendy Cinemas paid a $19,000 infringement notice penalty after the ACCC alleged it failed to display the total ticket price, including a per ticket booking fee, as a single figure when prices were first shown online. The ACCC signalled it was reviewing pricing practices across the cinema industry. The lesson for SMEs: you do not need to be a national airline booking platform to end up on the regulator's radar.
ACCC v eHarmony (ongoing)
In September 2023 the ACCC commenced Federal Court proceedings against dating platform eHarmony, alleging contraventions of ss 18, 29, 34 and 48 of the ACL. The allegations are a textbook study in subscription traps:
- advertising "free dating" that did not permit free two way communication
- automatic renewals disclosed only in small font late in the sign up process (in some cases renewing at higher prices for longer periods); and
- "one month" membership representations when the minimum term was actually six months
Whatever the outcome, the case previews the exact conduct the new subscription rules will directly prohibit.
These cases sit alongside the High Court's long standing guidance in ACCC v TPG Internet Pty Ltd (2013) 250 CLR 640 that the "dominant message" of an advertisement matters, and that fine print does not cure a misleading headline. The new legislation effectively converts that judicial attitude into express statutory obligations.
Small Businesses: Protection May Be Coming Your Way Too
Here is the part many SME owners miss: this reform is not only a compliance burden. It may soon be a shield.
On 3 June 2026, the government released a consultation paper (submissions closed 10 July 2026) on whether the unfair trading practices protections should be extended to small businesses and franchisees. The rationale is straightforward: Australia's 2.6 million small businesses, making up over 97% of all businesses, often face the same vulnerabilities as consumers when dealing with larger suppliers, landlords, platforms and franchisors. Think of a small importer locked into an auto renewing software contract with an offshore provider, or a franchisee facing take it or leave it terms and opaque fees.
If the protections are extended, small businesses would gain a new cause of action against unfair conduct by larger counterparties, complementing the existing unfair contract terms regime, which since November 2023 has carried substantial penalties for businesses that impose unfair standard form terms on small business customers.
What Your Business Should Do Before 1 July 2027
The commencement date may seem distant, but pricing systems, websites and contract suites take time to fix. We recommend:
- Audit your advertised prices. Every mandatory, unavoidable fee (booking fees, service fees, card surcharges that cannot be avoided) should be built into the first price a customer sees. An asterisk is not a defence
- Review your subscription and membership flows. Map how a customer signs up versus how they cancel. If cancellation requires phone calls, hidden menus or waiting periods that sign up does not, redesign it. Build automatic renewal reminders into your systems now
- Check your terms and conditions. Renewal terms, minimum periods and cancellation rights should be disclosed prominently at the point of sale, not buried in clause 47 of your T&Cs
- Look at your online design choices. Pre ticked boxes, countdown timers creating false urgency, and interfaces that obstruct or pressure customers are precisely what the general prohibition targets
- If you deal with larger suppliers, watch the small business consultation. If the protections are extended, you may gain new remedies against unfair conduct in your own supply and franchise relationships, and reviewing your key contracts now will put you in a position to use them
Conclusion
The unfair trading practices reform represents one of the most significant expansions of Australian consumer law in a generation. Businesses that treat 1 July 2027 as a distant problem risk being caught unprepared; those that begin their audit now will enter the new regime in a position of strength, and may even find they have gained new rights of their own. Sun Lawyers advises small and medium sized businesses on Australian Consumer Law compliance, standard form contract reviews, and commercial disputes. If you would like a pricing and subscription compliance review before the new regime commences, or advice on your rights against a larger supplier or franchisor, contact our office to arrange a consultation.