On 2 July 2026, the Federal Government passed the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 which adds new contraventions to the Australian Consumer Law (in Schedule 2 to the Competition and Consumer Act 2010 (Cth)) (ACL), being a:
- general prohibition on unfair trading practices towards consumers;
- contravention against drip pricing;
- requirement for information statements to be provided with subscription contracts; and
- requirement for subscription contracts to include a clear and easy method for termination.
These new sections will come into effect on 1 July 2027. In this article, we explain each of these new sections and outline what your business can do to start preparing for these changes.
What is the ACL?
The ACL is the national Australian law that protects consumers from unfair business practices when buying goods and services. The ACL imposes obligations on businesses to fairly, clearly and accurately communicate information to consumers so they can make informed decisions when making purchases. The new contraventions are designed to fill holes in the current ACL where businesses are being unfair or opaque, thereby causing detriment to consumers.
Unfair trading practices
The first contravention is against unfair trading practices. A business will engage in unfair trading practices if, when they supply or offer to supply goods or services to a consumer, the business’ conduct:
- does or is likely to manipulate the consumer and/or unreasonably distort the environment in which the consumer makes or is likely to make a decision; and
- causes or is likely to cause detriment (financial or non-financial) to the consumer.
In this context a ‘consumer’ is an individual and will not include consumers who are companies, or where supply is between businesses.
The contravention for unfair trading practices also includes a list of examples including where a business fails to disclose material information to a consumer, or discloses key information in a complex, ineffective, unclear, unintelligible, ambiguous, untimely or overwhelming way.
A practical example of unfair trading practice is where a business inaccurately indicates the amount of stock available for a product. This inaccuracy manipulates the consumer into a scarcity mindset that the stock may not be available, thereby causing a consumer to act quickly instead of shopping around. Without shopping around, the consumer may suffer a detriment of paying a higher price for the stock.
Drip pricing
Drip pricing is where the price for goods or services, known as the ‘base price’, is shown at the beginning of the purchase process, and as the purchase continues additional charges are added on, known as ‘transaction charges’. This practice usually occurs in online purchases. An example of drip pricing is where a consumer is booking accommodation and the base price is the cost of accommodation per night. As the purchase continues, transaction charges of booking and service fees are added to the base price, resulting in a higher final price than what the consumer initially anticipated.
When displaying prices, a business offering goods or services will need to display the base price with any transaction charges. The following details of the transaction charges must be included:
- the amount of the transaction-based charge, and if it cannot be calculated the method of calculation;
- that the transaction charge is per transaction;
- whether the transaction-based charge is or may be payable; and
- whether or not the base price displayed includes the transaction-based charge.
A transaction charge does not include an optional payment, a payment surcharge for processing or for the method of payment, any tax, duty, fee, levy or charge, or a transaction charge described in the rules. These excluded charges may require disclosure under other legislation, such as the GST Act 1999 (Cth), the Competition and Consumer Act 2010 (Cth) and other sections of the ACL.
When the transaction charge is displayed, it must be:
- shown while the base price is displayed;
- in close proximity to the base price; and
- in a legible, prominent and unambiguous way.
The display of base charges and transaction charges applies to goods or services ordinarily obtained for personal, domestic or household use or consumption. This reform does not apply to offers made exclusively to companies.
Subscription contracts
A ‘subscription contract’ is defined in the reforms as a contract for an indefinite period, a contract for a fixed period, a contract for an initial free period or a contract for an initial discount period. Subscription contracts do not include leases, licences for real property, or contracts for hire-purchase, payment in instalments or for supply of childcare or school fees.
Subscription contracts are now subject to two requirements:
- providing information statements; and
- having a clear and easy was to end the subscription contract.
Information Statement
With each subscription contract, suppliers of goods or services must provide a statement which outlines that it is a subscription contract and provide information about the subscription contract including the period of the contract, any renewal, extension or other continuation of the contract, and how a party can terminate. The statement must be displayed:
- in a comprehensible, audible and unambiguous way within a reasonable time before a person could agree to enter the subscription contract; or
- in a legible, prominent and unambiguous way which is in close proximity to where a person (other than the supplier) can agree to enter the contract.
Ending the Subscription Contract
If a supplier provides a subscription contract or is a small business (meaning a business which employs less than 100 people or has an annual turnover of less than AU$10 million) which uses standard form contracts, then that supplier must provide a way for the subscriber to end the contract. The method for ending the contract must be easy to find, straightforward, and require only steps that are reasonably necessary to end the contract and protect the consumers interests.
Methods of ending a subscription contract may include a clear statement on each customer’s account which outlines the steps to terminate, or if the subscription contract is entered online, having an easily accessible online portal to terminate the subscription contract.
How should my business prepare?
- To be prepared for these reforms, your business should:
- educate your staff on these reforms so they are aware and can alert you to any possible contraventions;
- review your trading practices and consider whether they would be categorised as unfair under the two limb test;
- review your pricing models and ensure that the base price and transaction charges are listed together, particularly if you have an online website;
- prepare information statements for your subscription contracts which includes all the necessary information; and
- review your subscription contracts, or if you are a small business your standard form contracts, to ensure there is a clear and easy method for terminating the contract.
Contraventions of any of these reforms may result in penalties of:
- for a company the greater of:
- $100 million;
- what a court determines is three times the value of the benefit the company incurred from the contravention; or
- if the court cannot determine the benefit incurred, 30% of the company’s turnover during the contravention; and
- for an individual the penalty is $2.5 million.
Contact us
If you believe you are required to comply with the reforms to the ACL, we recommend reviewing your business practices and documents to ensure compliance by 1 July 2027. For any questions regarding unfair trading practices, drip pricing, subscription contracts or the ACL generally, please contact a member of our Corporate & Commercial team.
| Disclaimer: This publication contains comments of a general nature only and is provided as an information service. It is not intended to be relied upon, nor is it a substitute for specific professional advice. No responsibility can be accepted by Rigby Cooke Lawyers or the authors for loss occasioned to any person doing anything as a result of any material in this publication.
Liability limited by a scheme approved under Professional Standards Legislation. © 2026 Rigby Cooke Lawyers |