New consumer law reforms for unfair trading practices, pricing and subscription contracts
The Federal Government has passed the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 marking a significant expansion of Australia's consumer protection regime.
Effective from 1 July 2027, the Bill introduces:
a new prohibition on unfair trading practices;
tougher measures to combat drip pricing; and
new protections for consumers entering subscription arrangements.
The new laws are aimed at addressing consumer harm in digital markets and will require businesses to reassess their customer-facing practices.
General prohibition on unfair trading practices
The Bill prohibits a person from engaging in unfair trading practices in connection with the supply, or proposed supply, of goods or services to consumers. [1] Conduct will be unfair if it:
- manipulates, or is likely to manipulate, a consumer;
- unreasonably distorts, or is likely to unreasonably distort, the environment in which a consumer makes decisions; and
- causes, or is likely to cause, detriment (financial or otherwise) to the consumer. [2]
The prohibition applies only in the consumer context. It does not apply where the consumer is a body corporate or where the relevant goods or services are acquired in the course of carrying on a business. [3]
Key areas of risk
The Bill identifies a non-exhaustive range of conduct that may constitute an unfair trading practice, including:
- impeding a consumer's ability to exercise legal rights or seek legal remedies;
- failing to disclose material information;
- presenting material information in a complex, unclear, ambiguous or overwhelming manner; and
- using digital interface design or other techniques that place consumers under unreasonable pressure or obstruct decision-making. [4]
A particular focus is likely to be so-called ‘dark patterns’ – online design techniques that influence consumer behaviour through manipulation rather than informed choice. Examples may include false urgency prompts, confusing cancellation pathways, pre-selected options that favour the business and other interface designs that steer consumers towards outcomes they might not otherwise choose.
Why does this matter?
The introduction of a general unfair trading practices prohibition closes a gap in the current consumer law framework. Businesses can no longer assume that conduct will avoid scrutiny simply because it is not misleading, deceptive or unconscionable.
The broad and principles-based nature of the prohibition means its boundaries will largely be shaped through future ACCC enforcement action and court decisions. As a result, businesses should review customer-facing processes, disclosures, marketing practices and digital interfaces to identify conduct that could be viewed as manipulative or as distorting consumer decision-making.
Drip pricing
The Bill introduces new anti-drip pricing provisions designed to improve fee transparency throughout the consumer purchase journey. Businesses that display a price for goods or services will be required to clearly disclose any mandatory transaction-based charges at the same time as the price is displayed.
Broadly, a ‘base price’ is the advertised price for the goods or services themselves, [5] while a ‘transaction-based charge’ is an additional mandatory fee payable as part of the transaction that is not part of the price of the goods or services. [6] Optional charges, payment surcharges and certain taxes, duties and levies are excluded. [7]
Where a business displays a base price, it must also prominently disclose information about any applicable transaction-based charge, including:
- the amount of the charge (or, if the amount cannot be calculated, how it will be calculated);
- that the charge applies on a per-transaction basis;
- whether the charge is or may be payable; and
- whether the displayed price includes the charge. [8]
This information must be displayed in a legible, prominent and unambiguous manner and in close proximity to the displayed price. [9] The requirement applies each time a base price is displayed, including throughout the purchasing process.
The reforms apply to goods and services ordinarily acquired for personal, domestic or household use and do not apply to offers made exclusively to corporate customers. [10]
Why does this matter?
The new provisions are aimed squarely at drip pricing – the practice of attracting consumers with an initial price and then progressively adding unavoidable fees as the transaction progresses.
While the Australian Consumer Law's existing single-price provisions require businesses in certain circumstances to specify the total price payable, [11] the new provisions go further by requiring mandatory transaction-based charges to be prominently disclosed whenever a base price is displayed.
For businesses, the practical impact is that fee disclosures can no longer be treated as a checkout issue. Pricing displays, marketing materials and online purchasing flows may need to be reviewed to ensure mandatory charges are clearly presented throughout the consumer journey, rather than only at the point of purchase.
Subscription contracts
The Bill introduces a new regulatory framework for subscription contracts, reflecting growing regulatory concern about subscription models that rely on inadequate disclosures, automatic renewals and difficult cancellation processes. [12]
The reforms impose obligations at three stages of the subscription lifecycle: when the subscription is offered, while it remains on foot, and when a customer seeks to cancel.
Upfront disclosure requirements
Businesses offering subscription contracts will be required to clearly disclose key information before the customer enters into the arrangement. This includes:
- the fact that the arrangement is a subscription contract; [13]
- any payment obligations; [14]
- the duration of the contract; [15]
- renewal, extension or automatic continuation arrangements; [16]
- any notice requirements for cancellation; [17] and
- how the subscription can be cancelled. [18]
This must be disclosed in a legible, prominent and unambiguous way in close proximity to where the contract can be entered, or (for oral contracts) in a comprehensible, audible and unambiguous way within a reasonable time before the person could agree. [19]
Ongoing customer notifications
The Bill also establishes a framework for regulations to mandate ongoing notifications during the life of a subscription contract. [20] While the details will be prescribed by future regulations, businesses should anticipate additional obligations relating to reminders, renewals and subscription-related communications.
Easy cancellation requirements
The most significant practical change is the requirement for businesses to provide a simple and accessible cancellation process. [21]
Suppliers must provide a cancellation method that is:
- easy to find;
- straightforward to use; and
- limited to steps that are reasonably necessary to end the subscription and protect the subscriber’s interests. [22]
Importantly, where a customer can enter into a subscription online, businesses must also provide an online cancellation pathway. [23]
Which contracts are covered?
The regime applies not only to consumer subscriptions but also to many small business subscriptions. [24]
Broadly, the provisions apply to:
- consumer subscriptions for personal, domestic or household use; [25] and
- standard form contracts with small businesses that employ fewer than 100 employees or have annual turnover below $10 million. [26]
The Bill adopts a broad concept of a subscription contract, capturing arrangements involving recurring payments, automatic renewals, free trials that roll into paid subscriptions and introductory pricing that automatically increases unless the customer takes action. [27] Certain arrangements, including leases, hire-purchase agreements, instalment contracts and some education and childcare contracts, are excluded. [28]
Why does this matter?
Businesses that rely on subscription-based revenue models should review their sign-up flows, renewal practices, customer communications and cancellation processes well before commencement. Particular attention should be paid to free trials, automatic renewals and any cancellation process that is more difficult than the sign-up process itself.
A mandated review of the subscription provisions must be conducted within two years of commencement (ie by 1 July 2029). [29]
Penalties
Contraventions of the new unfair trading practices, drip pricing and subscription contract provisions attract significant penalties. Corporations may face penalties of up to $100 million, three times the benefit obtained from the conduct, or 30 per cent of adjusted turnover during the breach period, whichever is greater. [30] Individuals face penalties of up to $2.5 million. [31]
What should businesses be doing now?
The new prohibition on unfair trading practices applies to conduct occurring on or after 1 July 2027. [32] The subscription contract provisions apply to contracts entered into on or after that date and may also apply to existing contracts that are renewed, extended or varied after commencement. [33]
Businesses should begin assessing their compliance readiness well in advance of 1 July 2027. In particular, businesses should review:
- customer-facing sales and marketing practices;
- online purchasing pages and digital interface design;
- pricing disclosures and fee structures;
- subscription sign-up, renewal and cancellation processes; and
- standard form consumer and small business contracts.
If you would like to discuss any aspect of these reforms, please contact Martin Ross or Peter Divitcos .
This article was prepared with the assistance of Georgia Godfrey, Law Graduate
[1] Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 (Bill), section 28B(1).
[2] Bill, s 28B(2).
[3] Bill, Schedule 1, Item 9.
[4] Bill, Schedule 1, Item 9.
[5] Bill, s 48A(6).
[6] Bill, s 48A(7).
[7] Bill, s 48A(8).
[8] Bill, s 48A(2).
[9] Bill, s 48A(3).
[10] Bill, ss 48A(1) and 48A(4).
[11] Competition and Consumer Act 2010 (Cth), Schedule 2, s 48.
[12] Bill, Schedule 1, item 20, Division 4A of Part 3-1.
[13] Bill, s 48D(2)(a).
[14] Bill, s 48D(4)(a).
[15] Bill, s 48D(4)(b).
[16]Bill, s 48D(4)(c).
[17] Bill, s 48D(4)(d).
[18] Bill, s 48D(4)(e).
[19] Bill, s 48D(3).
[20] Bill, s 48E.
[21] Bill, s 48F.
[22] Bill, s 48F(1)(b).
[23] Bill, s 48F(1)(c).
[24] Bill, s 48G.
[25] Bill, s 48G(1).
[26] Bill, s 48G(2).
[27] Bill, ss 48B(1) - (6).
[28] Bill, s 48C(1).
[29] Bill, item 21.
[30] Bill, ss 28B(3) and 28B(4).
[31] Bill, s 28B(6).
[32] Bill, s 311.
[33] Bill, s 312.
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