Australia’s unfair trading practices reforms have passed: Businesses have 12 months to get ready

Australia’s unfair trading practices reforms have now passed, giving businesses until 1 July 2027 to prepare for significant changes to the Australian Consumer Law. The reforms introduce a new prohibition on unfair trading practices, new anti-drip pricing requirements and comprehensive obligations for subscription contracts. Businesses that rely on online sales, digital customer journeys, recurring revenue models or subscription services should review their websites, pricing disclosures, renewal processes and cancellation pathways to ensure they do not use practices that could manipulate consumer decision-making or create unnecessary barriers for customers.

Businesses that rely on online sales, subscription models or complex customer journeys have 12 months to prepare for significant new consumer protection reforms.

On 1 July 2026, Parliament passed the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026, introducing a significant new layer of consumer protection under the Australian Consumer Law (ACL). The reforms take effect on 1 July 2027 and will reshape how businesses design, market and sell products and services to consumers.

These reforms are directed at practices that pressure, manipulate or trap consumers, particularly online.

What do the new unfair trading practices reforms mean for businesses?

The reforms focus on three areas: unfair trading practices, drip pricing and subscription contracts. From 1 July 2027, businesses will face:

1. A new general prohibition on unfair trading practices.
2. New anti-drip pricing rules.
3. New requirements for subscription contracts.

1. A new prohibition on unfair trading practices

From 1 July 2027, the ACL will contain a broad prohibition on businesses engaging in unfair trading practices towards consumers.

The prohibition applies to the supply, or proposed supply, of goods and services ordinarily acquired for personal, domestic or household use. It does not currently extend to conduct involving consumers that are companies.

A business will contravene the prohibition if it engages in conduct that:

• manipulates consumers or unreasonably distorts the environment in which they make decisions; and
• causes, or is likely to cause, detriment (financial or otherwise) to the consumer.

The prohibition is intended to capture conduct that may not breach the existing prohibitions on misleading or deceptive conduct, unconscionable conduct or unfair contract terms, but nevertheless distorts consumer decision-making.

A key target of the reforms is the use of “dark patterns” in websites and apps. These include tactics such as countdown timers, scarcity warnings, hidden information and cancellation processes that are far harder than sign-up.

Conduct that may fall within the prohibition includes:

• impeding consumers from exercising legal rights or remedies;
• failing to disclose material information;
• disclosing information in a way that is unclear, overwhelming or difficult to understand; and
• creating environments that place unreasonable pressure on consumers or obstruct them from implementing their decisions.

Of course, the legislation does not seek to prevent businesses from promoting their products or services but rather is directed at conduct that moves beyond mere persuasion and undermines genuine choice.

2. New rules for drip pricing practices

The reforms also introduce new requirements relating to transaction-based charges also known as ‘drip pricing’. Drip pricing describes when a business advertises one price, only for compulsory fees to emerge later in the purchasing process. For example, airfares, concert tickets or accommodation bookings that advertise a price at the outset but attract unavoidable service or booking fees at the point of checkout.

Under the new regime, where a business displays a price for consumer goods or services and a mandatory transaction-based charge applies, information about that charge must also be displayed. The required information must be:

• displayed whenever the base price is displayed;
• prominent, legible and unambiguous; and
• shown in close proximity to the price.

The intention is that consumers should understand the full cost of a purchase before they invest time and effort in completing it, removing surprise fees from the point of checkout.

3. Subscription contracts attract new obligations

The reforms also introduce a comprehensive new regime for subscription contracts.  Unlike the new unfair trading practices prohibition, the subscription reforms extend beyond consumer transactions and apply to many subscription arrangements offered to small businesses.

The regime captures a broad range of arrangements, including:

• automatically renewing subscriptions;
• free trials that convert into paid subscriptions;
• discounted introductory offers that roll into higher-priced subscriptions; and
• fixed-term contracts that automatically renew.

Certain contracts are expressly excluded, including leases, real property licences, hire-purchase arrangements, instalment contracts, childcare services and school education contracts.

Businesses offering subscription arrangements will face three core obligations:

• Disclosure obligations
  Subscribers must be given key information about the subscription before they sign up.
• Notification obligations
  Subscribers must receive prescribed information at key stages of the subscription, including around trial periods and renewals.
• Cancellation obligations
  Businesses must provide a straightforward way to cancel that involves only the steps reasonably necessary to end the subscription. In some cases, online subscriptions will need to be capable of being cancelled online.

The reforms are intended to address what the Government describes as “subscription traps”: business models that rely on customers overlooking a renewal, forgetting to cancel a free trial, or encountering unnecessary friction when trying to leave. As the Assistant Minister put it: “A subscription that can be entered in seconds should not take half an afternoon to escape”.

Why businesses should review customer journeys now

The new provisions sit within the ACL’s existing enforcement framework, exposing businesses to potentially substantial penalties on a per‑contravention basis.

More broadly, the reforms give the ACCC greater scope to scrutinise how businesses design and operate customer experiences. Businesses that may previously have avoided regulatory attention could face increased scrutiny of online purchasing pathways, subscription models, pricing disclosures, renewal processes and cancellation mechanisms.

How businesses can prepare before 1 July 2027

With commencement scheduled for 1 July 2027, businesses have a limited window to prepare.

Key actions include:

• reviewing websites, apps and checkout processes for potential “dark patterns”;
• assessing pricing and fee disclosures;
• reviewing subscription sign-up, renewal and cancellation processes;
• ensuring material information is presented clearly and prominently;
• testing customer experience from a consumer perspective; and
• updating compliance frameworks and staff training.

The countdown to 1 July 2027 has started. Now is the time to review how your customers buy, subscribe and cancel.

Businesses that identify potential issues early will be better placed to manage compliance risks and implement any necessary changes before the new regime takes effect. If you would like advice on how these changes could affect your business, contact Macpherson Kelley’s Competition and Consumer Law team.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.