Introduction

As foreshadowed in our article earlier this month, on 2 July 2026, the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 (the Bill) was passed, representing a significant expansion of the Australian Consumer Law (ACL). The Bill introduces:

• a new general prohibition on unfair trading practices;
• specific obligations regarding drip-pricing; and
• protections against unfair subscription practices.

The reforms are designed primarily to address conduct that currently falls into the gap between misleading/deceptive conduct, unconscionable conduct, and unfair contract terms, particularly in digital environments. These changes will come into effect from 1 July 2027.

General prohibition on Unfair Trading Practices

The ACL currently prohibits a person from engaging in misleading or deceptive conduct, unconscionable conduct, and unfair contract terms. The Bill introduces a contravention which prohibits a person in trade or commerce from engaging in unfair trading practices. In the new two-limb test, a person (including businesses) will contravene the ACL if it engages in conduct that:

1. manipulates a consumer, or unreasonably distorts the environment in which the consumer makes a decision; and
2. causes, or is likely to cause, detriment to the consumer.

Limb 1: Manipulates a consumer, or unreasonably distorts the environment

The manipulation and unreasonable distortion elements are not mutually exclusive, meaning a business may contravene the test by conducting behaviour that falls within both or either of these limbs.

Manipulation is intended to capture wrongful interference that changes a consumer’s behaviour or decision-making against the consumer’s interests. Examples are likely to include omitting or obscuring key information to enable sales, creating false urgency, or using ‘confusing, frustrating or high-pressure tactics’. Importantly, this does not require dishonesty.

Unreasonable distortion of the environment refers to conduct that ‘encourages a consumer to make economic decisions about proceeding with a transaction when they otherwise would have been unlikely to do so’, which may also include obstructing a consumer from implementing a decision they would otherwise have done, such as seeking a refund. This may occur if a purchasing environment is overwhelmingly complex, makes key information difficult to find or understand, or makes any actions that must be taken unclear. This may result in the consumer taking the easiest action or no action rather than the choice they actually want to make.

Dark patterns

A particular type of customer manipulation or distorted environment arises from ‘dark patterns’. This is conduct or tactics which may nudge or pressure consumers into unintended actions without their full awareness. This may include obstacles or complexity which ‘frustrate and exhaust’ consumers or otherwise exert pressure on consumers during a transaction process.

Examples include:

• difficult-to-find cancellation buttons;
• pre-selected options favouring the business;
• hidden or obscured information;
• false urgency messaging;
• countdown timers;
• misleading scarcity messaging (‘only 2 left’); and/or
• ‘confirm shaming’ where a consumer is made to feel bad about their choice.

While a single dark pattern may be legitimate in some circumstances, any single dark pattern may contravene that limb if it is used to pressure consumers and create false urgency. Multiple or combined dark patterns are likely to increase the likelihood that the business will contravene this limb.

Limb 2: Causes, or is likely to cause, detriment

Actual detriment is not required, and it is sufficient to establish that detriment is likely. Detriment may include financial loss or non-financial outcomes such as wasted time, inconvenience, or other negative impacts on a consumer. Non-financial detriment may be particularly relevant in relation to the digital economy, where many of these transactions may be taking place.

This prohibition is likely to become a significant enforcement tool used by the ACCC. Businesses may face scrutiny of:

• website design;
• app interfaces;
• sales funnels;
• promotional campaigns;
• customer service processes;
• cancellation procedures; and
• customer communications.

The test for the prohibition on unfair trading practices is intentionally broad and designed to capture emerging conduct not yet specifically legislated against. However, it is not designed to encapsulate business-to-business transactions or if the supply is in the course of the consumer carrying on a business. Further consultation is proposed on the best approach for protecting small businesses under these laws.

Protections against drip pricing

‘Drip pricing’ refers to the practice of businesses gradually adding fees during the transaction process, meaning consumers are unaware of mandatory transaction charges and cannot make informed decisions about whether to continue with the transaction with regard to the full price they will be required to pay until the customer reaches the checkout.

The new laws require the display of transaction based charges when relevant goods or services are offered for supply, a base price is displayed, and a transaction based charge applies. This is intended to ensure that consumers have all relevant information about potential transaction based charges at the same time they see the base price. An offer to supply goods through advertising, marketing or promotion will also trigger these requirements. Only goods or services of a kind ordinarily acquired for personal, domestic or household use or consumption are captured. This does not apply if the offer is made exclusively to a body corporate.

Transaction based charge

Practically, a transaction based charge is a mandatory fee that the customer must pay at the same time as paying for the goods or services, which is additional to the price of those goods or services. This may include the following charges as long as they are mandatory:

• booking fees;
• service fees;
• administration fees;
• handling fees;
• processing fees (except payment surcharges); and/or
• any other unavoidable fee added to the transaction.

Optional charges, such as gift wrapping, ticket insurance or optional express delivery, are not transaction based charges. Similarly, payment surcharges and taxes or government-imposed charges are not a transaction based charge.

This will materially impact businesses that commonly add mandatory booking, service, administration or processing fees after a headline price is displayed (tickets, travel, events, accommodation booking platforms and similar sectors). Those fees will likely need to be disclosed much earlier and more prominently in the purchasing journey.

Protections against detrimental subscription practices

Finally, the Bill introduces protections against detrimental subscription practices to ensure subscribers are informed about entering and remaining in a subscription contract, and that barriers for subscribers wanting to end their subscription contracts are removed. Both fixed and indefinite subscription contracts are covered, including those with initial free or discounted periods.

Before a consumer subscribes, businesses must now clearly and unambiguously disclose:

• that the arrangement is a subscription;
• pricing and liabilities that might be incurred under the subscription;
• trial periods and overall period of the contract;
• renewal, extension or other continuation mechanisms;
• cancellation requirements;
• notice periods; and
• cancellation methods.

In addition to the obligations before entering a subscription contract, the Bill also establishes notification requirements for subscriptions that are already in place. This is to ensure consumers remember that they are subscribed, are aware that a free trial is ending, know a subscription will automatically renew, or to otherwise avoid consumers remaining subscribed because renewal reminders are not provided.

Perhaps most significantly, the Bill introduces new conditions on the ability of consumers to end subscription contracts. The supplier of the services of the subscription must now provide a way for subscribers to end a contract that is:

• easy to find;
• straightforward; and
• only requires the subscriber to take steps that are reasonably necessary to end the contract and protect the subscriber’s interests.

Cancellation processes must be limited to steps that are reasonably necessary, ensuring that subscribers can cancel easily and without undue delay or frustration. For example, if a subscriber is required to attend a physical location to cancel the subscription or provide unnecessary feedback prior to cancelling a subscription, this is likely to be unreasonable. Further, if a subscriber can subscribe online, they must be able to cancel their subscription online.

The subscription regime extends beyond consumers to certain small businesses and applies to standard-form contracts where the subscriber:

• has fewer than 100 employees; or
• turnover below $10 million.

Penalties

Penalties are in line with other penalties under the ACL. Contravention of these provisions may expose a party to maximum civil penalties of:

• For non-body corporates – a fine of $2,500,000
• For body corporates – the greater of:
  • $100,000,000;
  • 3 times the value of the benefit received from the contravention; or
  • 30% of the body corporate’s adjusted turnover during the breach turnover period for the act or omission.

In addition to these penalties, an infringement notice may be issued by the ACCC for the breaches of the unfair trading practices provision.

Next steps for businesses

Before the Bill commences on 1 July 2027, business should consider reviewing:

• website and app interfaces;
• checkout processes;
• subscription sign-up and cancellation steps;
• renewal mechanisms;
• whether scarcity or urgency tactics are used in marketing;
• customer support systems;
• disclosure documents;
• terms and conditions;
• call scripts; and
• loyalty and retention programs.

Given the principles-based drafting of the unfair trading prohibition, much of its scope will likely be shaped by ACCC guidance, enforcement priorities and early court decisions after commencement.

If you would like to discuss the issues raised in this article, or your business’s operations more broadly, please contact Simon Ellis or other members of the Competition and Consumer team at HWLE.

This article was written by Simon Ellis, Partner, and Laura Fiebig, Solicitor.