Key takeaways
- The reforms primarily target businesses selling to consumers online, operating subscription models, or using headline pricing with mandatory add-on fees - particularly in e-commerce, retail, travel, ticketing, delivery and platform sectors.
- The Bill has passed the House of Representatives and is now before the Senate. It introduces a broad prohibition on unfair trading practices, including conduct that manipulates consumers or unreasonably distorts their decision-making environment.
- Subscription-based businesses - including those offering free trials - will face new mandatory disclosure, renewal reminder and simplified cancellation requirements. Cancellation must be no more difficult than sign-up.
- Businesses using "base price plus mandatory fee" models must prominently disclose all fees in close proximity to the advertised price. Fine print, hover-over explanations and late-stage checkout disclosures will not suffice.
- The reforms are proposed to commence on 1 July 2027. Businesses should begin reviewing standard terms, digital customer journeys, cancellation processes and marketing practices now.
Introduction
On 9 February 2026, Treasury released the Exposure Draft of the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 (Exposure Draft), proposing targeted amendments to the Australian Consumer Law (ACL). The consultation period closed on 23 February 2026. Following consultation, the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 (Bill) was introduced into Parliament on 1 April 2026. The Bill passed the House of Representatives on 14 May 2026 and has been referred to the Senate Economics Legislation Committee, which is due to report on 18 June 2026.
If passed, the reforms are intended to commence on 1 July 2027 and will introduce new obligations for consumer-facing businesses, particularly those operating online, in retail environments and through subscription-based models. The Bill also expands the scope of civil penalty risk under the ACL.
What the Bill provides
The Bill proposes three key amendments:
1. A general prohibition on unfair trading practices
For the first time, the ACL would include a broad prohibition on conduct in trade or commerce that:
- manipulates a consumer;
- unreasonably distorts the environment in which a consumer makes a decision; and
- where that conduct causes, or is likely to cause, detriment to the consumer.
Examples of conduct identified in the Bill's explanatory materials include:
- the use of confusing or overwhelming information that undermines informed decision-making;
- digital design features that apply undue pressure (such as countdown timers); and
- persuading or obstructing consumers in ways that make it difficult to exercise their contractual or statutory rights.
Key concepts such as "manipulation" and "unreasonable distortion" are not exhaustively defined in the Bill, meaning the courts will ultimately determine the scope of liability. The word "unreasonably" qualified the "manipulation" limb in the Exposure Draft, but was removed from that limb in the Bill as introduced. Commentators have noted that this change significantly broadens the potential reach of the prohibition.
As a result, many common online sales and marketing practices that are currently lawful may need to be reconsidered.
2. New protections against unfair subscription practices
The Bill proposes a specific framework for subscription contracts, requiring businesses to:
- clearly and prominently disclose key terms upfront, including price, fees, renewal terms, and cancellation rights;
- provide timely renewal and cancellation reminders;
- offer simple, accessible cancellation methods; and
- ensure that subscriptions entered into online can be cancelled online.
These requirements apply broadly, including to:
- fixed‑term and rolling subscriptions;
- free trials and promotional offers; and
- standard‑form subscription contracts with small businesses (being businesses with fewer than 100 employees or annual turnover under AUD $10 million).
The apparent policy intent is to ensure that subscribers can easily understand both the ongoing cost of a subscription and the steps required to end it.
3. Enhanced protections against drip pricing
The Bill strengthens existing controls on drip pricing. Drip pricing refers to the practice of advertising a headline price that does not include mandatory fees or charges, which are then incrementally disclosed (or "dripped") to the consumer during the transaction process, typically at or near the point of payment.
Where a business advertises a base price and applies mandatory transaction‑based fees, it must clearly disclose:
- the amount of the fee, or how it is calculated;
- whether the fee applies per transaction; and
- whether it applies to all transactions.
Disclosures must be clear, legible, prominent and displayed in close proximity to the advertised price.
Reliance on fine print, hover‑over explanations or late‑stage pop‑ups will generally be insufficient.
These obligations apply across all advertising channels, other than purely verbal representations.
Penalties
Contraventions of the proposed provisions will attract civil penalties under the existing ACL enforcement framework, which applies on a per‑contravention basis.
What this means for businesses
These reforms are primarily directed at businesses that sell to consumers through online channels, employ digital sales or marketing tactics, operate subscription or auto-renewal models, or rely on headline pricing with mandatory add-on fees. They will be particularly relevant to businesses in the e-commerce, retail, travel, ticketing, delivery and platform-based sectors.
The reforms will have practical implications for many businesses, particularly those operating digital sales channels or consumer-facing platforms. Given the Bill's passage through the House of Representatives, businesses should treat these reforms as likely to be enacted in substantially their current form.
In particular:
- online checkout processes, subscription sign‑up flows and cancellation pathways may require redesign to meet the proposed disclosure and accessibility standards;
- businesses using “base price plus mandatory fee” models (common in travel, delivery, ticketing and online retail) may need to reassess how fees are presented across websites, apps and advertising materials; and
- subscription‑based businesses will likely need to update contract terms, introduce new notification processes, and ensure that cancellation mechanisms are intuitive and frictionless.
More broadly, standard terms and conditions, cancellation policies, marketing guidelines and internal compliance frameworks should be reviewed now, well ahead of the proposed 1 July 2027 commencement date.
Given the breadth of the unfair trading prohibition (particularly following the removal of the "unreasonably" qualifier from the manipulation limb), and the absence of settled legal tests, businesses should expect increased regulatory focus and consumer scrutiny once the law commences.
How we can help
The Bill has passed the House of Representatives and is expected to be considered by the Senate following the Economics Legislation Committee's report on 18 June 2026. There is a limited window for businesses to assess how these reforms intersect with their existing contracts, digital practices and customer journeys before the proposed commencement date of 1 July 2027.
Russell Kennedy advises businesses across e‑commerce, retail and subscription‑based sectors on ACL compliance, contract design and consumer‑facing processes. If you would like to discuss how the proposed reforms may affect your business, please contact a member of our Corporate & Commercial team.
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