Australia’s consumer protection laws are about to undergo one of their most significant changes in decades. The Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 introduces a new prohibition on unfair trading practices, along with new rules targeting drip pricing and subscription contracts. The reforms will commence on 1 July 2027, giving businesses a limited window to review and update their sales, marketing and customer engagement practices.
Understanding the Existing Consumer Protection Framework
The new regime sits within the broader framework of the Australian Consumer Law (ACL), Australia’s uniform national consumer protection and fair trading legislation.
The ACL is contained in Schedule 2 to the Competition and Consumer Act 2010 (Cth) and applies nationally. In New South Wales, the ACL is adopted through Part 3 of the Fair Trading Act 1987 (NSW), where it operates as the Australian Consumer Law (NSW). The courts have repeatedly confirmed that the Commonwealth ACL and the ACL (NSW) operate together to provide a comprehensive and nationally consistent consumer protection framework.
The ACL currently regulates a broad range of conduct in trade and commerce, including:
- misleading or deceptive conduct (s 18);
- false or misleading representations about goods and services (ss 29-34);
- unconscionable conduct (ss 20-22A);
- unfair contract terms;
- statutory consumer guarantees; and
- product safety and information standards.
The primary objective of the ACL is to enhance consumer protection while providing a nationally consistent set of rules for businesses operating across Australia.
For many years, the ACL’s broad prohibition against misleading or deceptive conduct under section 18 has been the cornerstone of consumer protection enforcement. However, regulators have increasingly identified conduct that may be unfair or manipulative without necessarily being misleading, deceptive or unconscionable. The new unfair trading practices regime is designed to address that perceived gap.
Why the Change?
The reforms were introduced in response to concerns that certain business practices can disadvantage consumers without necessarily breaching existing provisions dealing with misleading conduct, unconscionable conduct or unfair contract terms.
Regulators and consumer advocates have identified a range of practices, particularly in digital environments, that can pressure, manipulate or frustrate consumers into making decisions they might not otherwise make. The ACCC has for some years argued that Australia’s consumer laws did not adequately address these emerging forms of consumer harm.
The New General Prohibition
From 1 July 2027, businesses must not engage in conduct that:
- manipulates a consumer; or
- unreasonably distorts the environment in which a consumer makes, or is likely to make, a purchasing decision,
where that conduct causes, or is likely to cause, detriment to the consumer.
The prohibition is intentionally broad and is designed to capture conduct that may fall outside existing ACL provisions.
Examples that may attract scrutiny include:
- creating barriers that make it difficult for consumers to exercise legal rights or cancel services;
- presenting important information in an unclear, ambiguous or overly complex manner;
- applying unreasonable pressure to encourage purchasing decisions; and
- using digital interface designs or “dark patterns” that steer consumers towards outcomes contrary to their interests.
New Drip Pricing Rules
The legislation also targets “drip pricing” practices, where consumers are shown an initial price but are later required to pay additional mandatory fees or charges.
Businesses will be required to disclose transaction-based charges more transparently so consumers can better understand the true cost of a product or service before committing to a purchase.
Businesses operating online, particularly in e-commerce, travel, ticketing and service industries, should review their pricing disclosures and checkout processes well before the commencement date.
New Rules for Subscription Contracts
The reforms also impose detailed obligations on businesses that offer subscription-based products or services.
These include:
- clear disclosure of key terms, pricing and renewal arrangements;
- reminder notices before renewals and before introductory or discounted periods expire; and
- straightforward cancellation processes.
Where customers can subscribe online, businesses will generally be required to provide an online cancellation mechanism.
These reforms are aimed at tackling so-called “subscription traps”, where signing up is easy but cancellation is unnecessarily difficult.
Significant Penalties
The new regime carries substantial penalties.
For corporations, the maximum penalty may be the greater of:
- $100 million;
- three times the value of any benefit obtained from the contravention; or
- 30% of adjusted turnover during the relevant breach period.
Given the scale of these penalties and the ACCC’s public focus on unfair trading practices, businesses should view these reforms as a significant compliance issue rather than merely another regulatory update.
What Should Businesses Do Now?
Although the reforms do not take effect until 1 July 2027, businesses should begin reviewing:
- customer acquisition and sales processes;
- website and digital platform design;
- pricing disclosures and checkout flows;
- subscription terms and renewal practices;
- cancellation procedures; and
- marketing and promotional activities.
Attention should be given to customer journeys, online interfaces and recurring revenue models to identify practices that may be perceived as manipulative or likely to distort consumer decision making.
Final Thoughts
For more than a decade, the ACL has provided a robust framework regulating misleading conduct, unfair practices, consumer guarantees and product safety. The new unfair trading practices regime represents the next significant evolution of that framework.
Businesses that have traditionally focused on avoiding misleading or deceptive conduct will now need to assess whether their broader customer engagement practices could be characterised as unfair. Organisations that proactively review their consumer-facing practices before July 2027 will be best placed to manage risk and avoid regulatory scrutiny.
