The Gap Section 28B Closes: Fair Game Ends Where Manipulation Begins
The existing ACL trio left a deliberate gap. Misleading or deceptive conduct (section 18) requires a misleading representation. Unconscionable conduct (section 21) requires conduct so far outside societal norms that it offends conscience. Unfair contract terms attack the written term, not the surrounding conduct. Conduct that pressures, obscures or exhausts a consumer without misleading them has, until now, fallen between these stools.
The High Court confirmed how high the unconscionability bar sits in Australian Securities and Investments Commission v Kobelt (2019) 267 CLR 1. A divided Court (four justices to three) held that a remote-community book-up credit system, under which a rural store retained customers’ debit cards and PINs, was not statutorily unconscionable. If retaining a customer’s debit card can survive section 21, an aggressive checkout flow certainly can. Section 28B is Parliament’s answer.
The new test in section 28B(2) has two limbs. First, the conduct must manipulate, or be likely to manipulate, a consumer, or unreasonably distort, or be likely to unreasonably distort, the environment in which the consumer makes a decision. Secondly, the conduct must cause, or be likely to cause, detriment to the consumer, financial or otherwise. Dishonesty is not required. Actual loss is not required.
The Explanatory Memorandum fixes the concepts. Manipulation means “wrongful interference with a consumer that results in a change in the consumer’s behaviour, decision-making or action that is against the consumer’s interests”. Unreasonable distortion captures conduct “encouraging a consumer to make economic decisions about proceeding with a transaction when they otherwise would have been unlikely to do so”. Ordinary, legitimate and accepted marketing is not intended to be captured. Exploiting cognitive biases is.
One drafting change deserves your attention. In the February 2026 exposure draft, the word “unreasonably” qualified both limbs. In the Act as passed, it qualifies only the distortion limb. Manipulation of a consumer need not be unreasonable to contravene section 28B. That single deletion materially widens the provision against the version most businesses reviewed during consultation.
Section 28B(6) tells you where the ACCC will look first. The non-exhaustive list of examples includes impeding a consumer’s ability to exercise legal rights or seek remedies, creating an environment (including through design elements in digital interfaces) that places the consumer under unreasonable pressure or obstructs their decision, and the following disclosure failure:
failing to disclose material information to the consumer or disclosing material information to the consumer in a complex, ineffective, unclear, unintelligible, ambiguous, untimely or overwhelming way Australian Consumer Law, s 28B(6), as inserted by the Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 (Cth), commencing 1 July 2027. |
The general prohibition protects individual consumers only. It does not apply where the customer is a body corporate or acquires the goods or services in carrying on a business, and financial services are excluded pending a separate consultation. Do not mistake the carve-out for safety: the subscription regime discussed below reaches small business customers directly.
Dark Patterns: Trivago Shows How Interface Design Becomes a Courtroom Exhibit
Australian courts have already condemned manipulative choice architecture under the existing law. In Trivago NV v Australian Competition and Consumer Commission [2020] FCAFC 185, the Full Federal Court (Middleton, McKerracher and Jackson JJ) upheld findings that Trivago’s hotel comparison site misled consumers. The site’s algorithm gave top billing primarily to the booking sites paying Trivago the highest cost-per-click fee. The top position offer was the cheapest available offer only 33.2 per cent of the time. Penalties totalled $44.7 million.
Relevant to liability for interface design, the Full Federal Court decided in Trivago NV v Australian Competition and Consumer Commission, by Middleton, McKerracher and Jackson JJ:
The issue in this appeal is whether the information Trivago conveyed or, importantly, did not adequately convey to consumers who used the Trivago website … either alone or together with Trivago’s advertising, was misleading or deceptive or likely to be so. At trial the primary judge held that it was. For the reasons that follow, his Honour’s conclusion was substantially correct. Trivago NV v Australian Competition and Consumer Commission [2020] FCAFC 185 (Middleton, McKerracher and Jackson JJ). |
The specific issue was what the interface did not say. Trivago’s liability rested on inadequate disclosure of how its ranking algorithm actually worked, combined with strike-through price comparisons that contrasted a standard room against a luxury room. The court accepted expert behavioural evidence that consumers facing too many options succumb to decision paralysis and take the first acceptable choice, and that present bias and loss aversion make design placement decisive.
False urgency has its own leading case. In Australian Competition and Consumer Commission v viagogo AG [2019] FCA 544, the ticket resale platform stacked countdown timers, “only 6 tickets left” banners and queue warnings through its checkout flow, while a booking fee of about 28 per cent surfaced only at the final step. Burley J found multiple contraventions; the scarcity claims were misleading because they referred only to viagogo’s own inventory, not to the tickets available for the event. Penalties of $7 million followed.
Relevant to false urgency, the Federal Court decided in Australian Competition and Consumer Commission v viagogo AG, by Burley J:
This process has the effect, if not the design, of distracting the consumer from content that is available … and corralling him or her towards speedy completion of the purchase. … At each stage the consumer is assured that tickets are running short, that time is running out to buy, and that the tickets that they have selected will soon be released to other, competing purchasers. The increasing urges to completion and the “hurry up” messages create such an impression that the consumer is at risk of missing out on tickets, that he or she is likely increasingly to confine attention to only that information necessary to enter details and complete the transaction. Australian Competition and Consumer Commission v viagogo AG [2019] FCA 544 at [75] (Burley J). |
Section 28B removes the last doctrinal hurdle. Trivago and viagogo still had to be framed as misleading representation cases. From 1 July 2027, design that pressures or obstructs is actionable directly: difficult-to-find cancellation buttons, pre-selected options that favour your business, countdown timers, false scarcity messaging and confirm shaming all sit squarely within the section 28B(6) examples. If your conversion metrics depend on friction, assume the ACCC will read your interface the way the courts read Trivago’s and viagogo’s.
Drip Pricing: Section 48A Ends the Headline Price Strategy
The High Court settled the psychology of headline pricing over a decade ago. In Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640, TPG advertised unlimited ADSL2+ broadband at $29.99 per month; the obligation to bundle a $30 monthly home phone line and pay a $129.95 setup fee sat in the fine print. The majority reinstated the $2 million penalty.
Relevant to headline pricing, the High Court decided in Australian Competition and Consumer Commission v TPG Internet Pty Ltd, by French CJ, Crennan, Bell and Keane JJ:
The tendency of TPG’s advertisements to lead consumers into error arose because the advertisements themselves selected some words for emphasis and relegated the balance to relative obscurity. … That consumers might absorb only the general thrust or dominant message was not a consequence of selective attention or an unexpected want of sceptical vigilance on their part; rather, it was an unremarkable consequence of TPG’s advertising strategy. Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 (French CJ, Crennan, Bell and Keane JJ). |
The specific issue was whether fine print could neutralise a dominant message. The Court held it could not: an advertisement is judged by the impression it creates in the marketing web, not by what a diligent customer eventually works out before signing. The erroneous belief at the point of enticement is enough.
New section 48A converts that case law into a bright-line duty. Where you display a base price for goods or services of a kind ordinarily acquired for personal, domestic or household use, and a mandatory transaction-based charge applies, you must disclose the charge legibly, prominently and unambiguously at each point the price is displayed, including in advertising. Booking fees, service fees, administration fees, handling fees and processing fees are all captured. Payment surcharges and taxes are excluded, as are genuinely optional extras.
The result is commercial, not technical. Ticketing, travel, events, accommodation platforms and food delivery businesses that reveal mandatory fees at checkout must now surface them next to the first advertised price. Parliament’s own example in the second reading speech was a concert ticket promoted at $109.90 that became $117.45 once a compulsory $7.55 service fee was added. Under TPG you risked a misleading conduct case; under section 48A the non-disclosure itself is the contravention.
Subscription Traps: From Chrisco to the Subscribe-Online, Cancel-Online Rule
Australian courts have long distrusted default-driven renewals. In Australian Competition and Consumer Commission v Chrisco Hampers Australia Ltd [2015] FCA 1204, Chrisco’s order forms rolled customers who had fully paid for their Christmas hampers into a “HeadStart Plan” for the following year, drawing further direct debits unless the customer opted out. Edelman J held the term unfair and void.
Relevant to automatic renewal defaults, the Federal Court decided in Australian Competition and Consumer Commission v Chrisco Hampers Australia Ltd, by Edelman J:
the primary manner in which the HeadStart term would cause detriment to a consumer if it were to be applied or relied on is that it would impose a significant financial detriment upon the consumer without any significant corresponding benefit Australian Competition and Consumer Commission v Chrisco Hampers Australia Ltd [2015] FCA 1204 (Edelman J). |
The specific issue was transparency. The rollover term was legible and technically disclosed, but it sat in small font, was ambiguous about cancellation, and extracted payments for goods the customer might never order. Disclosure that exists but does not communicate did not save the term in 2015. It will not save your subscription flow in 2027.
The new regime regulates the entire subscription lifecycle. Before a customer signs up, section 48D requires clear disclosure that the arrangement is a subscription, the term, the charges, any trial period, the renewal mechanics, and how to cancel. During the contract, you must send reminders, including before a free trial converts and before automatic renewal. At the exit, section 48F requires cancellation to be easy to find, straightforward and limited to steps reasonably necessary. If a customer can subscribe online, they must be able to cancel online.
Two extensions catch businesses off guard. First, the rules extend to small business subscribers on standard-form contracts, where the subscriber has fewer than 100 employees or turnover under $10 million. Your B2B SaaS contracts are not exempt. Secondly, the rules apply to renewals and variations of contracts that already exist. Your current subscriber book is captured at its first renewal after 1 July 2027, not grandfathered.
Penalties and Enforcement: A $100 Million Ceiling and a Regulator Already in Position
Parliament doubled the penalty during the reform process. The February 2026 exposure draft carried a $50 million maximum for body corporates. The Act as passed sets the maximum at the greater of $100 million, three times the value of the benefit obtained, or 30 per cent of adjusted turnover during the breach period. For individuals the maximum is $2.5 million. The ACCC can also issue infringement notices for unfair trading practices contraventions without going to court.
Parliament legislated on evidence of scale. The second reading speech put consumer detriment from unwanted subscriptions at $971 million per year, reported that three in four Australians have had a negative experience trying to cancel a subscription, and that one in ten say an online provider has manipulated their choices. More than half of reported consumer problems now arise from online purchases.
Enforcement will not wait for test cases to mature. The ACCC’s 2026-27 compliance and enforcement priorities, announced on 19 February 2026, already target subscription traps and other dark patterns, manipulative conduct in the digital economy, and pricing claims in retail and essential services. Assistant Minister Andrew Leigh described the mischief on passage: consumers “nudged and steered by online design features into decisions they wouldn’t otherwise make”.
Expect the first targets to be structural, not marginal. Businesses whose revenue models depend on obstruction (retention dark patterns, checkout fee reveals, silent renewals) face the same playbook the ACCC ran in Trivago: internal documents, expert behavioural evidence and conversion data used to prove that the design worked exactly as intended.
Your Compliance Roadmap to 1 July 2027
Twelve months is enough time if you sequence the work. We recommend three phases.
Phase one, now to December 2026: audit. Map every consumer interface against the section 28B(6) examples: checkout flows, cancellation paths, countdown timers, scarcity claims, pre-selected options and disclosure placement. Audit every advertised price for mandatory transaction-based charges revealed later in the funnel. Inventory every subscription product, its disclosures, reminders and cancellation mechanics, including small business standard-form contracts.
Phase two, January to April 2027: remediate. Re-engineer non-compliant flows, rebuild price displays so mandatory charges appear with the base price at every display point, implement reminder systems for trials and renewals, and stand up online cancellation wherever online sign-up exists. Amend terms and conditions and standard-form contracts in the same pass.
Phase three, May to June 2027: embed and evidence. Train marketing, product and customer service teams, update call scripts and campaign sign-off gates, and record the compliance decisions you made and why. A documented, board-visible compliance program is your strongest penalty mitigation if a contravention is alleged.
If you operate internationally, build one baseline. The reform is part of a global convergence: the United Kingdom’s subscription regime under the Digital Markets, Competition and Consumers Act is expected to commence in spring 2027, Germany already mandates an online cancellation button, France and the Netherlands require cancellation through the same channel as sign-up, and the EU is preparing a Digital Fairness Act aimed at dark patterns. A compliance program engineered for the strictest common standard will serve every market, and Australian-only businesses should not expect a softer local standard.
Franchisors and small business suppliers face a parallel set of issues under these reforms, which we examined in our earlier article on unfair trading practices in franchising. The general prohibition does not yet protect small businesses, but further consultation on extending it is already proposed.
Disclaimer: This article is provided for general information purposes only and does not constitute legal advice. Specialised legal counsel should be sought for specific fact patterns.
How We Help Consumer-Facing Businesses Comply
Boettcher Law advises online retailers, subscription businesses, platforms and franchisors on Australian Consumer Law compliance and disputes. We audit customer journeys against the new prohibitions, redraft terms and conditions and standard-form contracts, advise on ACCC investigations and infringement notices, and act in consumer law litigation in New South Wales, the ACT and the Federal Court. Your compliance review is scoped and priced before we start, and you deal with your solicitor directly.