First look at proposed unfair trading prohibitions

The Federal Government has released the Exposure Draft of the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026, which will introduce new unfair trading prohibitions to the Australian Consumer Law (ACL).

The proposed unfair trading practices regime will include:

1. a general prohibition on unfair trading practices;
2. a new regime applicable to subscription contracts; and
3. enhanced rules addressing ‘drip pricing’.

These reforms, which have been under consideration since 2020, are particularly targeted at potential consumer harm arising in the context of the digital economy.

The Federal Government has proposed that the new regime will commence on 1 July 2027. Businesses, particularly those that supply goods and services via subscription programs, should closely monitor the progress of these reforms and act early to ensure that their systems and processes are compliant prior to commencement of the regime.

The key elements of the regime are summarised below.

New prohibition on unfair trading conduct

The reforms include the introduction of a new general prohibition on unfair trading practices, being conduct that:

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

Unreasonable manipulation occurs when a business exploits consumers’ cognitive or behavioural biases in ways that push them into decisions that are not in their best interests. This includes tactics that go beyond legitimate and generally accepted marketing practices, such as creating false urgency, using obstructions, or using confusing, frustrating or high‑pressure tactics that skew consumer decision‑making.

Similarly, unreasonable distortion of the decision‑making environment is intended to capture conduct that encourages a consumer to enter into a transaction when they otherwise would have been unlikely to do so. This can occur when a business presents information or choices in an overwhelmingly complex, excessive or confusing way, making key details hard to find or understand.

The proposed law identifies three specific examples of unfair trading practices, being:

• interference with the consumer’s ability to exercise legal rights, or seek legal remedies, in relation to a supply of goods or services;
• failure to disclose material information, or disclosure of material information in a complex or ineffective way, to the consumer; and
• creation of an environment which places the consumer under unreasonable pressure in relation to, or obstructs the consumer from, making or fulfilling the consumer’s decision.

The prohibition is currently confined to supplies to consumers (as defined in the ACL). It does not apply when a consumer is a body corporate or when the supply occurs in the course of the consumer carrying on a business.

New obligations applicable to subscription contracts

The proposed reforms will also introduce a range of obligations aimed at addressing potentially unfair trading practices in the context of subscriptions.

These obligations apply to subscription contracts including:

• indefinite term subscription contracts;
• fixed term subscription contracts with automatic renewal; and
• free trial or promotional period subscription contracts.

The subscription rules apply in relation to consumer and small business standard form contracts. Certain types of contracts are excluded from the regime, including certain utility contracts, hire-purchase agreements, contracts for prescription healthcare products, leases, licences in respect of real property, and childcare and education services contracts.

The reforms set out prescriptive information requirements, including:

• when making an offer to supply goods or services under a subscription contract, suppliers are required to disclose key information, including details regarding the period of the contract, renewal and how the contract can be ended; and
• when supplying goods or services under a subscription contract, suppliers are required to:
  • notify subscribers of key information at key points throughout the subscription; and
  • ensure there is an easy to find and straightforward way for subscribers to end a subscription contract.

New prohibition on certain forms of drip pricing

The proposed laws will strengthen the existing single price display laws by introducing a new prohibition requiring businesses to disclose information relating to transaction-based charges in certain circumstances.

A transaction-based charge is a charge that is, or may be, payable by the purchaser for the supply of goods or services on a per transaction basis. Certain types of charges are excluded from the definition of transaction-based charges. This includes:

• a charge that is payable at the option of the purchaser;
• a payment surcharge within the meaning of Part IVC of the Competition and Consumer Act 2010 (Cth);
• delivery charges;
• certain taxes, duties, fees, levies or charges imposed on the supplier or payable by the supplier in certain circumstances; and
• any charge prescribed in the regulations.

Where a supplier offers to supply goods or services of a kind ordinarily acquired for personal, domestic or household use, the supplier must disclose the following information in relation to any transaction-based charge that applies in respect of the supply:

• the amount of a transaction based charge or the method of calculating the transaction based charge;
• that it is a per transaction charge;
• whether the transaction based charge will apply or may apply; and
• whether the base price includes the transaction based charge.

Penalties

The maximum penalties for contraventions of the new unfair trading prohibitions align with the existing penalties for contraventions of the ACL.

The maximum penalty for corporations is the greater of:

• $50 million;
• if the Court can determine the value of the 'reasonably attributable' benefit obtained, 3 times that value, or
• if the Court cannot determine the value of the 'reasonably attributable' benefit, 30% of the corporation's adjusted turnover during the breach turnover period for the contravention.

For individuals, the maximum penalty is $2,500,000 per contravention.

Next steps

Treasury will close the public consultation process on the exposure draft on 23 February 2026.

As the reforms are proposed to take effect from 1 July 2027, businesses should actively monitor progress of this bill and commence preparation at an early stage.

This is particularly relevant for businesses supplying goods or services under subscription models. These businesses will need to ensure that their systems and processes are compliant with the detailed and prescriptive requirements of the subscription provisions