The Federal Government has released an exposure draft of the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026, proposing major amendments to the Australian Consumer Law (ACL) to introduce a new prohibition on unfair trading practices, alongside targeted reforms on subscriptions and hidden fees. If passed, the reforms are expected to commence on 1 July 2027.
The Bill was formally introduced into the House of Representatives on 1 April 2026, following consultation on an earlier exposure draft. (see the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026).
📌 Key Takeaways
- The proposed reforms introduce a shift from technical compliance to a broader, fairness-based assessment of business conduct.
- Conduct that may currently be lawful could still be captured if it manipulates or distorts consumer decision-making.
- Businesses using complex pricing, subscription models, or digital sales techniques face increased scrutiny.
- Early review of customer journeys, disclosures, and cancellation processes will be critical to managing risk.
Why these reforms are being introduced
Treasury and consumer regulators have concluded that existing ACL provisions (misleading conduct, unconscionable conduct, unfair contract terms) do not adequately capture certain manipulative or opaque practices, particularly in digital and subscription‑based business models. The reforms are designed to address practices that:
- technically comply with current law, but
- nevertheless undermine genuine consumer choice or transparency.
Key proposed changes
1. A new general prohibition on unfair trading practices
The centrepiece of the reforms is a broad, principles‑based prohibition on unfair trading practices. A business will contravene the ACL if its conduct:
- unreasonably manipulates a consumer, or
- unreasonably distorts the environment in which a consumer makes a decision, and
- causes, or is likely to cause, detriment (financial or non‑financial) to the consumer.
Importantly:
actual loss is not required, detriment can include wasted time, confusion or pressure, and
the prohibition is intended to capture practices often described as “dark patterns”, such as false urgency, obstructive design or confusing disclosures.
2. Targeted reforms for subscription practices
The draft laws introduce prescriptive obligations for subscription contracts, aimed at tackling so‑called “subscription traps”. Key requirements include:
- clear upfront disclosure of key subscription terms,
- reminder notices before renewals, trial expiries or price increases, and
- simple and accessible cancellation processes, comparable to the sign‑up process.
These subscription protections will apply not only to consumers, but also to small businesses, which is particularly relevant in franchising contexts.
3. Stronger rules against “drip pricing” and hidden fees
The reforms also strengthen obligations around transaction‑based charges, requiring:
- mandatory fees to be disclosed clearly and prominently whenever a price is displayed, or
- where the exact amount cannot be calculated upfront, disclosure of the method for calculating the fee.
This is designed to prevent prices being revealed progressively through a checkout process.
Penalties and enforcement
If enacted:
- breaches will attract ACL civil penalties, up to the greater of:
- $50 million,
- three times the benefit obtained, or
- 30% of adjusted turnover during the breach period.
- the regime will be enforced by the ACCC and State and Territory regulators.
What this means for franchisors
For franchise systems, these reforms are particularly significant because they may affect:
- marketing and lead‑generation practices (especially online),
- mandatory fees and system charges disclosed to franchisees and customers,
- subscription‑style arrangements (software, platforms, ongoing service fees), and
- disclosure documents, manuals and operational practices across the network.
Franchisors will need to ensure that network‑wide practices do not create unfair pressure, confusion or artificial urgency, even if those practices have historically been lawful.
How MST Lawyers can help
These proposed reforms signal a clear shift in how business conduct will be assessed under the Australian Consumer Law. What may have previously been considered compliant could now expose your business to significant risk.
MST Lawyers advises businesses, franchisors and commercial operators on consumer law compliance, pricing structures, subscription models and regulatory risk. We can assist with reviewing your current practices, identifying potential exposure, and implementing practical changes ahead of the proposed 2027 commencement.
If your business relies on subscriptions, complex pricing or digital sales strategies, now is the time to act.
Contact MST Lawyers to discuss how these reforms may affect your business.
FAQs
What are unfair trading practices under the proposed law?
Unfair trading practices are business behaviours that unreasonably manipulate consumers or distort decision-making, causing harm such as financial loss, confusion, or pressure, even if the conduct is not currently illegal under existing laws.
When will the new unfair trading laws commence?
If passed, the proposed reforms are expected to commence on 1 July 2027, giving businesses time to review and update their practices to ensure compliance.
How will the new laws affect subscriptions and pricing?
Businesses will need to provide clearer disclosures, send renewal reminders, and make cancellations easy. Hidden fees and drip pricing will also be restricted, requiring upfront transparency around total costs.
