The government is also consulting on extending unfair trading protections to small businesses and franchisees, with submissions open until 10 July
It takes 30 seconds to sign up. It can take half a day to cancel. That experience, familiar to almost every Australian consumer and business, is about to become illegal.
The Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 passed the Australian Parliament on 2 July 2026. From 1 July 2027, unfair trading practices that have become standard operating procedure for some businesses will be banned under a significant strengthening of the Australian Consumer Law.
The practices targeted by the new legislation are ones most Australians have encountered directly. Subscription services designed to be easy to join and difficult to exit. Additional fees for service, handling, or processing that only appear at the final checkout screen and were not disclosed earlier in the purchasing process. Online design features that nudge or steer users toward decisions, purchases, or consents they would not otherwise have made. These practices, collectively known in consumer law as dark patterns and drip pricing, will be prohibited.
What is banned
The legislation creates a general prohibition on unfair trading practices, covering a broad range of conduct that falls short of outright deception but deliberately exploits the gap between what a consumer intends and what a business makes easy for them to do.
The most visible targets are subscription traps, where sign-up is straightforward but cancellation is buried in menus, requires a phone call, or involves multiple confirmation screens designed to create friction and discourage exit. Also covered are drip pricing practices where the price displayed early in a purchase journey does not reflect the price charged at the end, with fees added progressively or disclosed only at the point of payment.
Manipulative design features, sometimes called dark patterns, are also in scope. These include pre-ticked boxes, countdown timers creating artificial urgency, default settings that favour the business over the consumer, and interface designs that make certain choices visually prominent while hiding alternatives.
What the timeline looks like
The law passed Parliament on 2 July 2026. It does not take effect until 1 July 2027, providing a 12-month transition period for businesses to review and adjust their practices. The Australian Competition and Consumer Commission will receive additional funding to deliver guidance and education during this period to help businesses understand their obligations and prepare for compliance.
The government has been clear that the transition period is preparation time, not a grace period. Businesses that use it to genuinely review and reform their practices will be well positioned. Those that wait until mid-2027 to begin will be scrambling.
The small business angle
The new law affects small businesses from two directions simultaneously, and both are worth understanding.
As buyers, small businesses are consumers too. Anyone who has tried to cancel a SaaS subscription, been hit with processing fees not disclosed at the start of a transaction, or been auto-renewed on an annual contract they intended to exit will recognise what the legislation is targeting. Those protections now apply to small businesses as buyers of goods and services, not just to individual consumers.
As sellers, any small business that uses automatic renewal billing, subscription-based pricing, or multi-step checkout processes needs to review those practices against the new standard before 1 July 2027. The question to ask is straightforward: is there any point in our customer’s journey where we make it deliberately harder for them to cancel, exit, or understand the true cost of what they are buying? If the answer is yes, that needs to change.
There is also a third angle specific to small businesses and franchisees. The government has confirmed that consultation is already underway on extending unfair trading protections beyond consumers to small businesses and franchisees, covering situations where a larger party in a commercial relationship uses similar manipulative or exploitative practices against a smaller one. Submissions on that consultation are open until 10 July 2026. For small business owners and franchisees who have experienced this kind of conduct in their own commercial relationships, that consultation window is worth engaging with before it closes.
What to do now
For small businesses as sellers, the 12-month transition period is the time to act. Review any subscription or recurring billing arrangements your business operates and assess whether your cancellation process is genuinely straightforward. Review your checkout or invoicing process for any fees that appear late in the transaction that were not clearly disclosed upfront. Review any digital design choices in your online store or booking system that steer customers toward particular outcomes.
For small businesses as buyers, the new law does not come into effect until 1 July 2027. Practices that are currently legal remain so until that date. But understanding what the new standard looks like gives you a clearer framework for evaluating the commercial relationships and platform agreements you are already in, and for making better-informed decisions about the ones you are considering.
The ACCC will publish guidance for businesses during the transition period. Monitoring that guidance as it is released will be the most practical way to understand how the general prohibition on unfair trading practices will be applied in specific commercial contexts.
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