The Australian Consumer Law (ACL) sits in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (CCA) and applies uniformly across every state and territory. That national reach is backed by serious enforcement powers. The Australian Competition and Consumer Commission (ACCC) is the primary national regulator, and it operates alongside state and territory consumer protection agencies — such as NSW Fair Trading — under a "one law, multiple regulators" model.
This article explains the main tools those regulators can use against your business before a matter ever reaches a courtroom, what happens if it does reach a court, and the practical steps you can take to reduce your exposure.
The key concepts covered are:
- substantiation notices — when the ACCC demands proof of your claims
- public warning notices — how a regulator can warn consumers about your business in real time
- s 155 notices — the ACCC's compulsory information-gathering power
- civil and criminal penalties that flow from a proven breach
Substantiation notices
A substantiation notice is one of the most common early-stage enforcement tools under the ACL. When the ACCC suspects a business has made a claim it cannot back up — in advertising, on a product label, in a sales pitch, or in marketing material — it can require that business to produce proof that the claim is true.
The notice is issued under the ACL and gives the recipient 21 days to respond in writing. Within that window the business must provide the ACCC with the evidence that supports the representation, which may include scientific or technical reports, market research, laboratory testing results, or any other documented basis for the claim. The ACCC can grant an extension to the 21-day period if the circumstances justify it, but an extension is not automatic and must be applied for before the deadline lapses.
The standard the ACCC applies is substantiation, not perfection. A business that has genuinely invested in verifying its claims before making them — and has documented that process — will generally be better placed to respond than one relying on internal assumptions or anecdotal experience.
Failure to respond, or a response the ACCC considers inadequate, can itself trigger an infringement notice or escalate the investigation. Non-compliance is not treated as a technicality; it signals to the regulator that the underlying conduct may be more serious. Where a business refuses or fails to respond to a substantiation notice and the ACCC considers it in the public interest, the regulator can move directly to issuing a public warning notice.
Public warning notices
A public warning notice is a notice the ACCC publishes — typically on its website and through media releases — warning consumers about the conduct of a specific business. The public warning notice register is publicly searchable, meaning customers, suppliers, investors, and media can find it.
Before publishing such a notice, the ACL requires the ACCC to be satisfied of several things:
- it has reasonable grounds to suspect the business's conduct breaches the ACL;
- at least one person has suffered, or is likely to suffer, detriment as a result of that conduct; and
- issuing the notice is in the public interest.
In practice, the ACCC tends to issue public warning notices where there is an urgent need to protect consumers — for example, where a product poses a physical safety risk, or where a scam or fraudulent scheme is causing widespread financial loss. The reputational consequences of a public warning notice can be severe and difficult to reverse even if the underlying matter is later resolved in the business's favour.
Because the ACCC does not need a court order before publishing a public warning notice, businesses have no opportunity to seek injunctive relief beforehand. If a notice is issued, your options are limited to engaging with the regulator quickly, providing substantiating evidence, and if appropriate, seeking legal advice about whether the statutory preconditions were met.
Section 155 notices
Separate from and broader than a substantiation notice, a compulsory information-gathering notice under s 155 of the Competition and Consumer Act 2010 (Cth) is one of the ACCC's most powerful pre-litigation tools. It is used at any stage of an investigation into conduct that may contravene the CCA or the ACL.
A s 155 notice can require a person or entity to:
- provide written information about its operations, practices, or conduct;
- produce documents — including contracts, internal communications, financial records, and other materials — relevant to the ACCC's inquiry; and
- attend an oral examination and give evidence under oath or affirmation.
Compliance with a s 155 notice is compulsory. There is no right to simply ignore it. Failing to comply by the specified deadline carries a maximum penalty of $33,000 for individuals and $165,000 for corporations. Knowingly providing false or misleading evidence in a s 155 examination is a criminal offence.
The ACCC publishes guidelines on its use of s 155 powers that set out the circumstances in which it will issue such a notice and the procedures it follows. If your business receives a s 155 notice, obtaining legal advice promptly is strongly advisable — the notice will specify a deadline, and the consequences of missing it or of providing inadequate information are significant.
Penalties and court outcomes
If the ACCC decides to take enforcement action in court, a finding that your business breached the ACL can result in a range of consequences.
Civil pecuniary penalties for the most serious ACL contraventions — such as false or misleading representations, unconscionable conduct, and certain product safety breaches — are among the most substantial in Australian commercial law. For corporations, the maximum civil penalty is the greater of:
- $50 million;
- three times the value of the benefit the corporation obtained from the breach (if that amount can be determined); or
- 30% of the corporation's adjusted turnover during the period of the conduct.
These amounts reflect amendments made by the Treasury Laws Amendment (More Competition, Better Prices) Act 2022 (Cth), which significantly increased maximum penalties from their previous levels.
For individuals, the maximum civil penalty for the same categories of offence is $2.5 million.
Beyond financial penalties, courts can also make orders requiring:
- the business to implement and maintain a compliance programme — including staff training, internal procedures, and regular reporting;
- corrective advertising — the business must publish notices informing the public of its breach and the outcome of the enforcement action (a particularly damaging order for consumer-facing brands);
- adverse publicity orders — similar to corrective advertising, requiring the business to publicise its own wrongdoing; and
- disqualification of individuals from managing corporations.
For the most serious conduct — for example, deliberate price-fixing or conduct endangering consumer safety — the ACL also provides for criminal prosecution resulting in fines or, for individuals, imprisonment.
Where common mistakes happen
Most ACL enforcement actions against small and medium businesses arise not from deliberate deception but from one of a handful of recurring errors:
Making claims you haven't verified. Saying your product is "the most effective" or "clinically proven" when you don't have documentation ready to back it up exposes you to a substantiation notice. The ACCC does not need to prove the claim is false — it can simply require you to prove it is true.
Using templated terms and conditions that don't reflect your actual practices. Clauses that limit statutory consumer guarantees, impose unfair cancellation terms, or misrepresent your return and refund obligations can each attract scrutiny. Terms that purport to exclude rights consumers have under the ACL can be found to be misleading or void.
Assuming the ACCC is too busy to notice smaller breaches. State and territory regulators also enforce the ACL and are often more active in specific industries or sectors. The "one law, multiple regulators" model means that even if the ACCC is not investigating your sector, your state fair trading authority may be.
Not treating a substantiation notice seriously. Some businesses assume an early-stage notice is administrative and can be ignored or responded to informally. Non-compliance can itself attract penalties and is treated by the ACCC as an indicator that the underlying conduct warrants escalation.
How Artificer Legal can assist
The ACL enforcement process is not a single event — it typically unfolds in stages, from an initial inquiry through to formal investigation and, potentially, litigation. Legal advice at each stage can significantly affect the outcome.
When you receive a substantiation notice or a s 155 notice, a lawyer can help you:
- Assess the scope of what you are required to provide and identify any information that may be protected by legal professional privilege (which is generally preserved in the s 155 process).
- Compile and review responsive documents before they are produced, to ensure they are responsive to the notice and that privileged materials are correctly identified.
- Prepare for an oral examination, if one has been ordered — including understanding the questions you may face and your rights during the examination.
- Engage with the ACCC to seek extensions, clarifications, or early resolution where the facts support it.
- Audit your existing marketing claims and business practices against ACL requirements, so that any further notices or investigations can be met with confidence.
If court proceedings are commenced, the penalties framework makes early resolution — including through enforceable undertakings — often preferable to defending an action. Artificer Legal can advise on whether an undertaking is appropriate and, if so, negotiate its terms.
Summary
The ACCC and state and territory regulators have a layered set of enforcement tools under the ACL, each of which can cause significant disruption and reputational damage before any court ever makes a finding. Substantiation notices put the burden of proof on your business to justify its own claims. Public warning notices can go live without a court order. Section 155 notices compel the production of documents and oral evidence, with criminal penalties for non-compliance. And if the matter reaches a court, the penalties available are among the highest in Australian commercial law.
The most effective protection is proactive: verify claims before you make them, keep your documentation, review your standard-form terms against ACL requirements, and take any notice from the ACCC or a state fair trading authority seriously from the moment it arrives.