An end to subscription traps? New unfair trading practices laws coming July 2027

Treasury released draft legislation on 9 February 2026, proposing amendments to the Australian Consumer Law (ACL) which introduce a new general prohibition on unfair trading practices and specific obligations to address unfair subscription practices, requiring businesses to simplify cancellation processes and provide timely notices of renewal, among others.

Consultation closed on 23 February 2026 on the exposure draft of the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 (Cth) (Bill). If passed, the proposed reforms are expected to commence on 1 July 2027.

Key takeaways from the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 (Cth)

The direction is clear - businesses will need to examine their sales and marketing practices, particularly online, to ensure they are adopting legitimate and reasonable marketing practices. If you are profiting from confusion, subscription traps and not sending renewal reminders, pay attention.

The Bill has proposed:

1. a new general prohibition on practices that either unreasonably manipulate a consumer or distort the environment the decision-making environment for a consumer, in a way that causes or is likely to cause, financial or other detriment;
2. for businesses with subscription-based offerings to disclose and remind consumers of their subscriptions with clear upfront statements of key terms and timely notices before renewals, trial expiries or discounted periods expiries; and
3. for businesses to disclose any transaction-based charges alongside the base price or where the charge cannot be calculated, the method for calculating it.

The general prohibition and transaction-based charges are aimed at protecting consumers acquiring goods or services for personal, domestic or household use, while the subscription related protections will also extend to small businesses.

Businesses that breach the proposed provisions risk facing significant penalties, including a maximum of $50 million, three times the value of any benefit gained, or 30% of the businesses adjusted turnover during the breach period.

If you want to understand what the proposed reforms mean for your business and practical assistance with the proposed changes, please get in touch with our technology and consumer law experts, Alex Hutchens and Melissa Miller.

How did this come about?

The Commonwealth, State and Territory Consumer Affairs Ministers agreed to explore potential unfair trade practices prohibitions in late 2020. There have been various consultation processes since then and on 19 December 2025, Treasury released a Decision Regulation Impact Statement (DRIS) indicating the Government’s intention to improve protections for consumers against unfair trading practices, signalling to the changes underscoring the Bill.

While the Bill is still under review, the Australian Competition and Consumer Commission (ACCC) has commenced enforcement actions under the existing ACL provisions for practices that would be prohibited under the Bill, including in relation to alleged subscription traps and drip pricing.

New prohibitions and obligations

The Bill introduces a general prohibition on unfair trading practices to address conduct that does or is likely to unreasonably distort or manipulate consumer decision-making and cause (or is likely to cause) financial or other detriment. There is a non-exhaustive list of practices that may contravene the general prohibition detailed in the Bill including:

1. interference with a consumer’s ability to exercise legal rights or seek legal remedies in relation to supply;
2. failure to disclose material information, or disclosing material information in a complex or ineffective manner; and
3. creating an environment where a consumer is under unreasonable pressure in relation to or obstructs from making or fulfilling the consumer’s decision.

While this is a general and broad prohibition intended to be flexible for emerging technology, there is an intention to address conduct involving ‘dark patterns’. A ‘dark pattern’ is a design of a user interface or environment that intentionally aims to confuse consumers, limit their ability to express genuine preferences, or manipulate them toward unintended actions and choices. The design choices steer consumers toward outcomes that align with the business-favoured option.

While one dark pattern alone may not manipulate a consumer, using multiple dark patterns can make them harder to spot and resist, with greater potential of influencing the consumer’s decision-making.

Some examples include:

1. using countdown timers to create a misleading sense of urgency or scarcity;
2. navigation loops that make it difficult to locate material information, such as pricing or cancellation terms;
3. the use of gamification or tactics that make a consumer feel that they have earned a discount, when the discount is actually offered to any consumer; and
4. requiring that a consumer sign up or sign in to view a website product or make a purchase.

The Bill targets drip pricing by requiring suppliers to clearly disclose any transaction-based charges alongside the base price of a product or service, preventing businesses from adding extra fees later in the purchasing process and ensuring consumers understand upfront how the final price is calculated.

This means when supplying goods or services, if there is a transaction fee, it cannot be displayed on the final page before payment and instead should be displayed in close proximity to the base price.

Businesses offering subscription‑based products and services will have stronger disclosure obligations

Subscription-based businesses will be required to give consumers timely reminders at key stages of their agreement to help prevent them from remaining subscribed unintentionally. This includes:

1. before a consumer enters a subscription, businesses must provide a clear notice outlining the key terms, including the contract type, pricing (including any trial or discounted period), and how to cancel;
2. for fixed-term subscription agreements, businesses must send a reminder a reasonable time before the last opportunity to cancel or before the initial term ends, and then continue providing reminders either:
   1. every six months for agreements that renew for less than 12 months, or
   2. before each annual renewal (and before the final chance to cancel) for agreements that renew for 12 months or more;
3. for indefinite-term subscriptions, businesses must issue reminder notices at least every six months for as long as the subscription continues; and
4. for free-trial or discounted subscriptions, businesses must issue a reminder notice (including the date the discounted period ends) before the earlier of the final chance to cancel before charges apply and the end of the discounted period, noting that these arrangements may also be fixed‑term or indefinite and will attract the relevant additional obligations.

Businesses also need to review their avenues for cancellation to ensure they are easy to find, simple and only involve steps that are reasonably necessary to cancel the subscription.

The disclosure obligations for subscriptions will not extend to public utility contracts (other than telecommunications and transport), real‑estate leases or licences, hire‑purchase or instalment‑payment contracts, the supply of prescription healthcare products, school or childcare services, or any other contracts later prescribed by regulation.

Who is protected?

The prohibitions on dark patterns and transaction-based charges are aimed to protect consumers obtaining goods or services ordinarily acquired in personal, domestic or household use, while the subscription‑trap protections will extend to small businesses. The Explanatory Memorandum of the Bill and the Minister for Consumer Affairs has suggested that more protections for small businesses are expected to be considered in upcoming reforms.

Enforcement and penalties

Breaches of the proposed unfair trade practices can attract pecuniary penalties and other enforcement options including disqualification from managing a corporation.

For body corporates, the maximum penalty is the greater of $50 million, three times the value of any benefit obtained resulting from the breach, or 30% of adjusted turnover during the breach period (where the benefit cannot be determined).

The maximum penalty for an individual is $2.5 million.

What you need to do now

With the Government demonstrating a clear direction for greater obligations on businesses to be transparent with consumers, businesses should:

1. review their current sales, pricing displays and digital design practices to identify potential unfair trading practices;
2. map its subscription process and assess whether cancellation processes need to be changed to be clearer and easier to implement, and timely notices are given before renewals; and
3. conduct updated and regular consumer law training to embed compliance within the business.