Andrew Leigh (Fenner, Australian Labor Party, Assistant Minister for Productivity, Competition, Charities and Treasury) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 amends the Australian Consumer Law and implements the government's commitment to protect consumers from unfair trading practices, subscription traps and drip pricing.

Australians know exactly what this bill is about because they have lived it. Trying to decide on an online purchase, they suddenly find themselves pressured with a countdown timer or a warning that there are 'only two left in stock', despite the fact that the retailer has plenty available. They subscribe to a gym and manage the payment online, but, when they try to unsubscribe, they are told they have to make a phone call. They spot a bargain online, but when they get to the check-out they discover a compulsory 'service fee' added to their basket. This isn't vigorous competition. It is friction by design.

The way Australians buy and subscribe has changed profoundly. Today, people make decisions about goods and services in many different ways: by strolling the aisles of their local stores, by searching online for the best price or by entering subscription arrangements that renew automatically. Some transactions take place entirely in person, while others occur entirely online, but the experience of choosing and managing services now spans a wide range of channels.

These changes have given Australians more choice and convenience, but they have also created conditions in which certain business practices can pressure, confuse or trap consumers. Australians are hardworking and fair minded. We expect businesses to compete vigorously and to innovate. But we also expect that competition to occur on fair terms. We do not expect to be steered into decisions we didn't intend or worn down by design features that make the right decision harder than it should be.

The evidence suggests these aren't isolated irritants. More than half of reported consumer problems now occur from online purchases. One in 10 people say that an online provider has manipulated their choices, while more than a quarter encountered unexpected charges added late in the transaction. In a digital economy, design isn't neutral. Buttons, prompts, defaults, timers and cancellation pathways can all shape behaviour. These are signs of a marketplace in which confusion, pressure and obstruction can become a business model.

Over the past four years, through detailed consultation with consumers, businesses, experts, regulators and our state and territory counterparts, a clear message emerged. There are practices that do not meet the threshold for misleading or deceptive conduct, and that may also fall short of the high bar for unconscionable conduct, but which nevertheless distort decision making, cause real harm and impose an economic cost. These gaps in the Australian Consumer Law allow manipulative or unreasonably distortive tactics to slip through, even when the impact on consumers is significant.

This bill closes those gaps. It modernises the Australian Consumer Law to reflect the realities of how Australians now buy, compare and subscribe. It ensures consumers are protected not only from outright deception but also from the kinds of subtle, cumulative influences that can undermine genuine choice.

This bill does three things.

A general prohibition on unfair trading practices

First, the bill introduces something Australians might reasonably have assumed already existed: a simple rule that businesses should not engage in unfair trading practices.

It sets a straightforward principle: businesses must not manipulate consumers or unreasonably distort the environment in which consumers make, or are likely to make, decisions, in circumstances that cause, or are likely to cause, detriment.

This is a principles based test. It captures conduct that does not neatly fall within the existing prohibitions on misleading conduct or unconscionability, but which nonetheless exploits behavioural biases, overwhelms consumers with complexity, or structures choices in a way that leads people towards decisions they would not otherwise make.

To provide practical guidance, the bill includes a non-exhaustive, indicative list of examples of practices that may contravene the new prohibition. These include:

These examples help businesses understand where the line is drawn without restricting ordinary, legitimate commercial behaviour. This prohibition isn't about stopping businesses from promoting their products. It's not about stopping advertising. It's about dealing with conduct that crosses the line from persuasion into manipulation, conduct that harms consumers and undermines fair competition.

Stopping drip pricing

Second, the bill deals with a practice that almost every Australian has encountered. A consumer sees a price that seems reasonable. But as they progress through the transaction, new fees begin to appear, a booking fee here, a service charge there, often only revealed at the very end of the process.

In one example, a concert ticket promoted for $109.90 rose to $117.45 once a compulsory $7.55 service fee was added at the last stage of the process. By then, the consumer has already invested time and attention, and may feel locked into completing the purchase.

That is drip pricing. Australians have had a gutful.

This bill requires businesses to disclose mandatory transaction-based charges at the same time they display the base price. There should be no last-minute surprises, no artificially low headline prices that rise only after the consumer has invested time and attention, and no reliance on the consumer's reluctance to abandon the purchase after coming so far.

The bill does not prohibit transaction fees. It prohibits hiding them. It ensures that businesses doing the right thing are not disadvantaged by competitors who conceal the true cost until the final step.

That matters for competition as well as fairness. We know from behavioural economics that people anchor on the first price they see, and once they have invested effort in reaching the final stage of a transaction, they're less inclined to walk away. A business that discloses its full price upfront should not be made to look more expensive than a rival that waits until the final screen to reveal unavoidable charges.

Ending subscription traps

Third, this bill addresses subscription traps, a growing frustration in modern consumer life. Subscriptions are now a regular part of household budgeting. Subscriptions provide access to news, fitness, entertainment, software and many other services. But too often, subscription arrangements are designed around the assumption that consumers will forget to cancel free trials, won't notice renewals, or will struggle to find the cancellation pathway.

Research from the Consumer Policy Research Centre shows the scale of this issue. Three in four Australians have had a negative experience when trying to cancel a subscription. Nearly half have spent more time than intended trying to exit a service. One in three have felt pressured to stay. One in 10 Australians has given up trying to cancel and kept paying for a service they no longer wanted. Some people have been so frustrated by unwanted subscriptions they've chosen to cancel a credit card or a bank account just to get rid of the recurring subscriptions. The estimated consumer detriment from spending on unwanted subscriptions by Australian consumers is $971 million per year. This is a hidden drain on household budgets.

This bill addresses these problems directly.

Businesses must clearly disclose that a customer is entering a subscription, what it costs, how long it runs, how it renews, and how it can be ended. The information must be provided prominently and in a way that is easy to understand.

The bill also establishes a framework for reminder notices, ensuring that consumers receive timely, sensible prompts when a trial period is ending or a renewal is approaching.

In addition, cancellation must be straightforward. It must be easy to find. And it must require only the steps that are reasonably necessary.

A contract that can be entered in seconds should not take half an afternoon to escape. Many reputable businesses already operate in this simple, fair, transparent manner. This bill ensures that all businesses meet that standard.

Broader competition and consumer agenda

The bill forms part of a wider agenda to strengthen competition, improve transparency and support consumers across the economy.

Our government has legislated the most significant overhaul of Australia's merger laws in 50 years, ensuring that large mergers are properly assessed before proceeding and that anticompetitive acquisitions don't escape scrutiny.

We've increased funding for the Australian Competition and Consumer Commission by more than $30 million, enabling stronger action against misleading pricing tactics, particularly in supermarkets and other consumer facing markets.

We have outlawed unfair contract terms, and for the first time gave the Australian Competition and Consumer Commission and Australian Securities and Investments Commission the power to seek penalties against companies that breach those laws.

We're strengthening the Unit Pricing Code and cracking down on shrinkflation. Australians will be able to see clearly when a product has gotten smaller, but the price has stayed the same or gone up.

Under the former government, the supermarket food and grocery code was merely voluntary, without penalties for wrongdoing. Labor's food and grocery code is mandatory, backed by strong penalties that prevent supermarkets from using their market power to unfairly squeeze farmers and other suppliers.

Penalties matter. That's why this government has increased the first limb of the maximum penalties under the Competition and Consumer Act—from $10 million to $50 million in 2022, and last month up to $100 million. Stronger sanctions ensure that breaches of consumer law can't be dismissed as a mere cost of doing business. They ensure that businesses of all sizes face meaningful consequences for conduct that undermines fairness.

In the labour market, reforms to non-compete clauses and other restrictive practices will help improve job mobility and productivity. The right to repair is being extended to agricultural machinery, ensuring that farmers have genuine choice in how they service their equipment.

Through a revitalised National Competition Policy, supported by a $900 million National Productivity Fund, the government is working with states and territories to remove commercial and industrial planning and zoning barriers that make it hard for new entrants to compete. We're progressing reforms to create a single national market for goods, streamline standards, improve heavy vehicle productivity, and improve occupational licensing so that workers can move more freely across jurisdictions. We're also supporting health and care professionals to work to their full scope of practice.

Together, these reforms strengthen competition and dynamism, boost productivity and contribute to a fairer marketplace.

Other unfair trading practices

This bill focuses on consumer protections. But unfair trading practices don't only affect individuals. Small businesses and franchisees often face the same vulnerabilities when dealing with larger suppliers.

The explanatory memorandum notes the government will consult on extending unfair trading protections to small businesses, including those in franchising. That work is underway.

We will release a public consultation on the expansion of these reforms shortly and will have legislation in parliament later this year.

Working closely with the Assistant Treasurer and Australian Securities and Investments Commission, we will consider whether any alignment of protections within the financial services sector is necessary. Any expansion will be considered carefully, respecting the distinct frameworks providing consumer protections for financial products and advice.

In presenting this bill, we reaffirm a basic principle: markets work best when they're fair. When consumers are respected rather than worn down. When design helps people make informed choices rather than steering them into unwanted ones. When transparency is rewarded and hidden fees are not.

The reforms in this bill, banning unfair trading practices, cracking down on drip pricing, and cleaning up subscriptions, will give Australians back time, clarity and agency. It will strengthen trust and boost competition. And it will make the Australian marketplace a place where good businesses thrive by doing the right thing.

They will also help restore confidence that online markets can work on straightforward terms: when prices are what they seem, when leaving a service is as simple as joining it, and where firms who act fairly are not punished. For example, nine in ten Australians say that they would likely purchase from the same organisation if cancelling its subscription was quick and simple.

I want to acknowledge the vital contribution of the Australian Competition and Consumer Commission, including Chair Gina Cass-Gottlieb and Deputy Chair Catriona Lowe, whose enforcement work and market studies have provided important insights into the effects of unfair trading practices.

Australia's consumer movement has also been instrumental in consistently bringing consumer experience to the forefront, including Erin Turner and her team at the Consumer Policy Research Centre, Stephanie Tonkin and her team at the Consumer Action Law Centre, former CHOICE CEO Ashley de Silva and his team, Jeannie Paterson and her team at the University of Melbourne's Centre for Artificial Intelligence and Digital Ethics, as well as community legal centres, financial counsellors and many others.

I also acknowledge the strong support and partnership of my state and territory consumer affairs minister colleagues and their officials: Anoulack Chanthivong, Nick Staikos, Deb Frecklington, Guy Barnett, Tara Cheyne, Tony Buti, Marie-Clare Boothby and former South Australian minister Andrea Michaels. Reform of this scale is only possible when all governments share a commitment to fairness and transparency.

I thank the experts in Office of Parliamentary Counsel and in the Department of Treasury, including Nicole Ryan, Phoebe Butcher, Stacie Lawson, Tessa Cramond, Matthew Osinski, Ira Goyal, Reese O'Sullivan, Megan Peterson, Taylor Fouracre and Angelina Kosev, and my advisers Tori Barker and Meg Thomas, for their work on this bill. Their hard work has helped forge a fairer society and a more dynamic economy.

This bill is a principled, proportionate and timely response to real harms identified through genuine consultation, backed by evidence, and aligned with Australians' sense of fairness.

It ensures the Australian Consumer Law remains robust and capable of protecting people in a rapidly changing economy.

The reforms will not only protect consumers but also support productivity by promoting dynamic and competitive markets. They will help ensure businesses are not incentivised to adopt unfair tactics, and will increase consumers' confidence to engage in markets, particularly when transacting online.

Full details of the measure are contained in the explanatory memorandum.

Debate adjourned.