Competition and Consumer Law Reforms – Doing Business with Consumers Is Changing: What to Expect from 1 July 2027

As of 2 July 2026, the Competition and Consumer Amendment (UnfairTrading Practices) Bill 2026 passed both Houses amending the CCA, includingthe ACL, with the reforms scheduled to come into effect on 1 July 2027:

· enacting new general prohibition on unfair trading practices;

· stronger disclosure obligation regarding drip pricing rules; and

· regulating unfair subscription practices.

These amendments come in the wake of the changing landscape of the marketplace and the effect of changing technologies impacting the marketplace. The amendments aim to bridge the gap between the changing landscape and address certain conduct that currently falls outside the scope of the ACL.

General Prohibition on Unfair Trading Practices

Despite the ACL already containing prohibitions on specific unfair practices including false or misleading representations about goods or services and the assertion of rights to payment for unsolicited goods or services, feedback on the governments consultations papers found that businesses were increasingly using harmful practices in online and offline practice.

While there are existing provisions in the ACL, offering consumers some protections, certain practices, particularly those emerging in the digital market, do not always meet the threshold to breach the existing ACL provisions. This has left consumer exposed to potentially harmful or manipulative conduct that falls beyond the reach of the existing regulatory framework.

The bill has introduced new general prohibitions on conduct inconnection with the supply of, or an offer to supply, goods or services that:

· does, or is likely to do, either or both of the following:
- manipulate the consumer; 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 (whether financial or otherwise) to the consumer.

The new provision aims to protect the consumers broadly from practices that the consumer detriment but do not squarely meet to the requirements for misleading or deceptive conduct, unconscionable conduct, may not involve unfair contract terms or involve conduct otherwise prohibited under the ACL.

Broadly, the new provision contains two limbs. The first limb, in turn, identifies two non-exhaustive forms of conduct that may fall within its scope.

The first prohibits conduct that is likely to manipulate the consumer, primarily in digital interfaces. As described in the explanatory memorandum, such conduct may exploit common cognitive or behavioural biases and does not explicitly require dishonesty. For example, capitalising or profiting from transactions resulting from omitting or concealing key information, creating false urgency, or the use of confusing, frustrating or high-pressure sales tactics.

The second concerns conduct that unreasonably distorts the environment in which the consumer makes, or is likely to make, a decision. Examples of situation which may result in unreasonable distortion of the consumers purchasing environment include, situations where the consumer is subject to excessive or confusing information making key information difficult to find, understand or focus on. For example, attempting to cancel a membership or subscription, but not cancelling because the process to do so is complicated, unclear or unnecessarily long, causing the consumer to not cancel, despite initially wanting to do so.

Other examples include:

· long and complex online menus, with pre-selected or defaults items, which are preferred by the business;

· hidden or difficult to locate links to reject cookies or cancel subscriptions;

· business using obfuscation techniques to lead consumers away from certain outcome that differed from the businesses preferred outcome; and

· countdown timers or low stock notifications to create a sense of urgency and creating a false sense of urgency.

While one singular action may not explicitly manipulate the consumer or unreasonably distort the environment, businesses should be wary that multiple actions may increase the likelihood of the consumer to resist these techniques.

The second limb is invoked where a person must engage in conduct that causes, or is likely to cause, detriment. Detriment is an established principle used in the unfair contract terms regime in Part 2-3 of Chapter 2 and in not limited to financial detriment and is broad enough to allow the court to consider situation where there are other forms of detriment.

Drip Pricing Rules

Drip pricing broadly refers to a deceptive sales tactic whereby a business advertises a product at a low base price and gradually adds further fees and costs, like service charges, taxes and other mandatory costs, as the customer moves through the checkout process.

Classic examples where these practices commonly appear include:

· airline tickets, where the business advertises cheap base ticket price but later throughout the transaction adds mandatory booking fees, baggage costs, or seat selection fees costs as the transaction progresses;

· hotel and Airbnb listings advertising only the costs for the day/night but revealing mandatory resort or cleaning fees only near the final payment screen; and

· ticketing sites listing low ticket prices for events and later adding service fees and processing fees at checkout.

The current reform strengthens the protection against drip pricing by requiring businesses offer goods and services at a base rate to disclose proximately and disclose upfront, any applicable transaction-based charges applicable to that transaction.

Unfair Subscription Practices

The new provisions also introduce specific protections for consumers entering into subscription contracts. A contract will be a subscription contract where it provides for the recurring or continuing supply of goods or services for an indefinite period, a fixed period, an initial free period or an initial discounted period.

Certain categories of contract are excluded from the subscription contract regime. These include leases, licences in respect of real property, hire-purchase contract, contacts that involve payments in instalments, contracts for the supply of childcare, pre-school or school of tuition at a pre-school, pre-primary, primary or secondary level, or a contract of a kind prescribed inthe regulations.

The requirements under the new Division only apply to a supply or offer to supply that is made ‘in trade and commerce’.

The new provision to the ACL also imposes disclosure requirements on businesses that offer the supply of goods and services under a subscription contract. These disclosure requirements include:

· a statement that makes it clear that, if entered, the relevant contract would be a subscription contract;

· clearly stating the liabilities to pay that a party other than the supplier would or may incur under the contract i.e. the price of the base subscription fee and any additional fees or charges;

· the period of the contract;

· details regarding the renewal, automatic renewal or extension of the contract;

· if there are any notice requirements to cancel the contract; and

· how the consumer can terminate or end the contract.

Importantly, these disclosure requirements concern not only what information must be disclosed but also how and when the information is presented. The required information must be clear prominent and unambiguous to the consumer and provided to the consumer at a reasonable time before they agree to enter the contract.

The reforms also address the process by which consumers can exit subscription arrangements. Businesses supplying goods or services under a subscription contract must provide subscribers with a means of ending the contract. consumer must be provided a method to terminate the subscription contract

Each method provided for termination must be easy to find and straightforward to use, and may only require the subscriber to take steps thatare reasonably necessary to end the contract. These requirements are significant in the context of subscription models because they address practices that may not prevent cancellation outright, but nevertheless make the process sufficiently difficult, confusing or burdensome to discourage a consumer from completing it.

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Disclaimer

This article is provided for general information purposes only and does not constitute legal advice. It is not intended to address the specific circumstances of any individual or business, and reliance should not be placed on it as a substitute for obtaining legal advice tailored to your particular situation. Legal advice should be sought before taking steps in relation to a request to work remotely in accordance with the proposed amendments to Competition and Consumer Act 2010 (Cth), including the Australian Consumer Law.