On 9 February 2026, the Australian Government released exposure draft legislation (the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 (Draft Bill)) to amend the Australian Consumer Law (ACL). The Draft Bill would introduce:
a new general prohibition on unfair trading practices (UTP)
targeted subscription contract requirements to curb unfair subscription practices
stronger disclosure obligations around transaction-based charges to combat drip pricing.
The Draft Bill does not include specific prohibitions on dynamic pricing.
The Draft Bill follows years of consultations and aims to address what the Government describes as manipulative and opaque market practices, especially in digital environments, that it considers are not adequately addressed by existing ACL prohibitions. We previously reported on the proposals to prohibit UTPs.
The Draft Bill, if passed, is expected to apply from 1 July 2027 and will require businesses to undertake a thorough review of their marketing, sales and contracting practices to ensure compliance. While the new general UTP provision is not intended to prohibit “reasonable sales tactics used to influence consumers and promote products and services”, the potential scope is likely to be broad.
Submissions on the Draft Bill can be made to Treasury by 23 February 2026.
Summary
The Draft Bill includes:
A new general prohibition of UTPs that would ban conduct toward consumers that:
unreasonably manipulates consumers; or
unreasonably distorts the environment in which the consumer makes a decision; and
is likely to cause detriment.
New disclosure obligations for subscription contracts, including point-of-offer disclosures, reminder notices during the subscription and clear cancellation pathways, with obligations varying depending on whether the contract is for a fixed-term, indefinite-term or includes a free-trial or promotional period.
Stronger protections against ‘drip pricing’ by requiring prominent, proximate disclosure of any transaction-based charges whenever a base price for goods or services is displayed, to ensure consumers are aware of mandatory per-transaction fees throughout a consumer’s purchase journey.
These measures are intended to complement existing ACL provisions on misleading or deceptive conduct, unconscionable conduct and unfair contract terms, while closing perceived gaps exposed by evolving marketplace practices and technologies. They will be subject to the civil penalty provisions in the ACL.
Despite being included in Treasury’s November 2024 supplementary paper, the Draft Bill does not include specific prohibitions on dynamic pricing (the practice of varying prices for goods or services based on factors such as real-time demand) because such practices are already covered by existing prohibitions against misleading or deceptive conduct.
The new general prohibition on unfair trading practices
The proposed prohibition would capture conduct in trade or commerce connected to the supply or offer to supply goods or services to a consumer that unreasonably manipulates the consumer; or unreasonably distorts the decision-making environment; and causes, or is likely to cause, detriment (financial or otherwise).
To contravene the prohibition, both of the following elements must be satisfied:
1. Unreasonable manipulation or distortion of environment: a person supplying or offering to supply goods or services must not unreasonably manipulate the consumer or unreasonably distort the environment in which a consumer makes, or is likely to make, a decision. The Draft Bill includes an indicative list of conduct that ‘may’ contravene the prohibition, including:
interfering with a consumer’s ability to exercise legal rights or seek legal remedies;
failing to disclose material information or presenting it in a complex or ineffective way; or
creating an environment that places unreasonable pressure on a consumer to make a decision or obstructs them from making or fulfilling the consumer’s decision.
The explanatory materials highlight online ‘dark patterns’ such as obstructive menu design, pre-selected options, hidden cancellation flows, artificial urgency and low-stock prompts as examples of conduct that may unreasonably manipulate or distort the environment. These materials also go further to suggest that ‘confirm shaming’, which is where a consumer is unfairly made to feel bad about a choice including stoking guilt or regret, is another example.
2. Detriment to the consumer: the conduct must not cause detriment or be likely to cause detriment to the consumer. This is not confined to financial loss and can include time loss and other adverse impacts. This approach is consistent with the existing concept of detriment used in the unfair contract terms regime. This concept is also used as part of the test of whether a term in a standard form contract is unfair, and the case law makes clear the threshold for detriment is low.
The prohibition will apply economy-wide to online and offline contexts, and captures conduct linked to advertising, promotion and marketing as part of an ‘offer to supply’.
Exceptions to the general prohibition
The prohibition does not apply where the consumer is a body corporate (that is, another business) or where the supply occurs in the course of the consumer carrying on a business. This limits the prohibition to consumer‑facing conduct rather than business-to-business dealings. The supplier bears the evidential burden of proving that this exception applies.
Subscriptions: disclosure, notifications and easy exit
The Draft Bill proposes to impose specific disclosure obligations on suppliers in relation to three types of subscription contracts:
indefinite term
fixed term (with auto‑renewal)
contracts with free trial or promotional (discount) periods,
where either the ‘consumer requirement’ or the ‘small business requirement’ is met, recognising the similar risks faced by small businesses.
There will be new, upfront disclosure obligations that apply when goods or services are offered for supply under a relevant subscription contract, including through advertising, marketing and promotion. Suppliers will need to include a statement that the contract is for a subscription and whether it is a fixed-term, indefinite or free-trial period, and also disclose information about:
any future payment obligations under the contract
any initial term of the contract
renewal options for the contract
whether any notice is required before the subscriber can end the contract
how the subscriber can end the contract
any other matter prescribed by the regulations.
If goods or services are offered to the public at large, the supplier must ensure the required disclosures are publicly available. All disclosure obligations must be provided to potential subscribers in a legible, prominent and unambiguous manner.
Suppliers must also provide an ‘easy to find and straightforward’ method of ending a subscription, requiring only steps reasonably necessary to effect cancellation and protect the subscriber’s interests.
Additional ongoing disclosure obligations will also apply during the subscription at various intervals, depending on whether the subscription contract is for a fixed term, indefinite term or promotion or free trial period.
Liabilities to pay that the subscriber would or may incur under the contract in the future.
The initial term of the contract, if applicable.
The renewal options for the contract.
Whether any notice is required before the subscriber can end the contract.
How the subscriber can end the contract.
This information must be given to the subscriber at the following intervals:
A reasonable time before the earlier of the last time the subscriber can stop the contract renewing at the end of the initial term and at the end of the initial term.
If the contract is renewed for a period of less than 12 months, each six months.
If the contract is renewed for a period of 12 months or more, a reasonable time before the earlier of the last time the subscriber can stop the contract renewing and the next renewal of the contract.
Liabilities to pay that the subscriber would or may incur under the contract in the future.
The indefinite period of the contract.
Any notice required before the subscriber can end the contract.
How the subscriber can end the contract.
This information must be given every six months while the contract is in effect.
The date that the discount period ends.
The date by which the subscriber must end the contract before liability is incurred.
How the subscriber can end the contract before incurring liability.
Period of the contract after the discount period ends.
Renewal (if any) of the contract after the discount period ends.
The liabilities to pay that the subscriber would or may incur under the contract after the discount period ends.
This information must be given to the subscriber a reasonable time before the earlier of:
the last time the subscriber can end the contract before incurring a liability to pay or pay a higher rate
the end of the discount period.
Strengthened protections against drip pricing
The Draft Bill includes new requirements to disclose transaction‑based charges when any ‘base price’ is displayed for goods or services ordinarily acquired for personal, domestic or household use or consumption. These reforms are targeted at ‘drip pricing’, which is where businesses gradually add fees during the transaction process, obscuring the total amount payable. These new requirements will apply in addition to the existing provisions of the ACL which require the total minimum price for goods or services to be specified as a single figure.
These disclosure obligations will apply where:
a relevant good or service is offered for supply;
a base price is displayed (being the price attributable to the good or service, and excluding other charges, taxes or fees); and
a transaction-based charge applies.
Where these obligations apply, four categories of information must be disclosed prominently and in close proximity to the base price:
the amount of a transaction-based charge, if it can be calculated when the base price is displayed (and if not, the method to calculate it must be disclosed)
that the charge is a per-transaction fee
whether the transaction-based charge will apply or may apply
whether the base price displayed includes the transaction-based charge.
Penalties and enforcement
All the new obligations will be subject to civil penalties aligned with the current maximum penalties for false or misleading representations, unconscionable conduct and unfair contract terms. For bodies corporate, the maximum penalty per contravention is the greater of $50 million, three times the value of the benefit, or 30% of adjusted turnover. For individuals, the maximum penalty is $2.5 million. It is also proposed that the ACCC will have the power to issue infringement notices for alleged contraventions of the general prohibition.
ACL compliance has been a key focus of the ACCC in recent years, with the ACCC seeking and the courts imposing record penalties on contravening businesses.
Overseas experiences
The Government’s proposed reforms are occurring in the context of similar developments in overseas jurisdictions. By way of example:
Jurisdiction | Proposed reforms | |
United Kingdom | The United Kingdom’s Digital Markets, Competition and Consumers Act 2024 (DMCC Act) introduced new substantive protections for consumers, including in relation to drip pricing and subscription contracts. Specifically, the DMCC Act:
| |
United States | The Federal Trade Commission (FTC) issued a rule in 2025 prohibiting unfair and deceptive fees. The rule applies specifically to the live events and short-term lodging industries and specifies that:
The FTC has also issued a rule in relation to subscriptions in 2024, titled ‘Rule Concerning Recurring Subscriptions and Other Negative Option Programs’. This rule:
However, in July 2025, this rule was struck down, with the US Court of Appeals for the Eighth Circuit vacating it on procedural grounds. Recently, the FTC has sought to update the rule. | |
European Union | The European Union recently consulted on a proposed Digital Fairness Act which aims to strengthen protection and digital fairness for consumers. If enacted, it will target the use of dark patterns and unfair practices related to the marketing of the price of goods, among other things. | |
Canada | 2022 amendments to Canada’s Competition Act added a new provision prohibiting drip pricing as a form of false or misleading representation, in both its civil and criminal codes. | |
South Korea | In 2025, South Korea amended its Act on Consumer Protection in Electronic Commerce, specifically targeting the use of dark patterns. The amendments introduced obligations and prohibitions in relation to hidden renewals, drip pricing, obstruction of cancellation/withdrawal and repeated interference with the consumer’s choices, among other things. |
Implications and next steps
While the ACCC has already been taking enforcement action under existing ACL provisions in relation to subscription traps and other conduct to which these reforms are directed, it is clear that once enacted, these reforms will impose a heavier compliance burden on consumer-facing businesses selling in Australia. In practice, consumer-facing businesses will need to consider their selling practices to ensure compliance with the new disclosure obligations and to reduce the risk of contravening the new UTP prohibition.
This includes reviewing their booking and customer onboarding processes, updating their terms and conditions, assessing customer service and cancellation pathways and ensuring online interfaces do not create unreasonable pressure or obstruction including for cancellations.
The proposed reforms in the Draft Bill are planned to come into effect from 1 July 2027. This is to provide time for businesses to amend and update their existing contracts and selling and marketing practices. This may not be the end of the proposals, with the Government making clear it will continue to consult on extending the general UTP prohibition to small businesses as well as to financial products and services, both of which are not covered by the current proposals.
Treasury seeks submissions on the Draft Bill until 23 February 2026.