Running a business in Australia means operating inside a legal framework designed to keep markets honest and competitive. The rules that govern "unfair business practices" are not a footnote — they apply to advertising copy, sales conversations, standard form contracts, pricing displays, and much more. Getting them wrong can expose a business to penalties that, since November 2022, have increased dramatically.
This article explains:
- the core prohibitions in the Australian Consumer Law (ACL) that govern unfair business practices
- how each category of conduct works in practice
- the penalty regime that applies when things go wrong
- where businesses most commonly come unstuck
- how Artificer Legal can help you build compliant processes
What the Australian Consumer Law prohibits
The ACL is set out in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (CCA) and applies to anyone engaged in trade or commerce — including most B2B relationships. Five categories of prohibition are relevant to unfair business practices.
Misleading or deceptive conduct — s 18
Section 18 of the ACL prohibits a person, in trade or commerce, from engaging in conduct that is misleading or deceptive, or that is likely to mislead or deceive. No proof of intent is needed, and no-one needs to actually be misled — a likelihood is enough.
The section is broad by design. It reaches advertising, product packaging, website content, social media, verbal statements made during a sale, pricing displays, and any other communication made in the course of conducting business. If a reasonable member of the audience would be left with a false impression, the conduct is at risk.
Unconscionable conduct — ss 20 and 21
The ACL contains two distinct unconscionability prohibitions that operate alongside each other.
Section 20 prohibits conduct that is unconscionable within the meaning of the unwritten law — that is, the equitable doctrine of unconscionable conduct developed by Australian courts. It captures situations where one party exploits the special disadvantage of another, such as an inability to understand a transaction, extreme financial pressure, or vulnerability arising from age, illness, or language barriers.
Section 21 goes further. It prohibits unconscionable conduct in connection with the supply or acquisition of goods or services more broadly, without requiring proof of a specific equitable category of disadvantage. Courts look at the totality of circumstances: the relative bargaining strength of the parties, whether conditions were imposed that were not reasonably necessary, whether a party was required to comply with practices that were harsh, oppressive, or difficult to understand, and whether any industry code was breached.
Both sections apply in commercial contexts, including B2B dealings. A business that uses superior bargaining power to impose unreasonable conditions on a smaller supplier, or that exploits a customer's obvious vulnerability, is at real risk under one or both sections.
False or misleading representations — s 29
Section 29 prohibits specific categories of false or misleading representations made in connection with the supply of goods or services. These include representations about:
- the standard, quality, grade, or composition of goods
- the price of goods or services
- testimonials from customers or endorsers
- the sponsorship, approval, or affiliation of a person or product
- the place of origin of goods
- the availability of repair and spare parts
Unlike the broad s 18 prohibition, s 29 targets defined categories of specific statements. A business that claims its product is "made in Australia" without meeting the substantiation standard, or that uses a fabricated customer testimonial, is directly in scope.
Unfair contract terms — s 23
Section 23 renders void any term in a standard form consumer contract or standard form small business contract that is "unfair." A term is unfair if it:
- causes a significant imbalance in the parties' rights and obligations;
- is not reasonably necessary to protect the legitimate interests of the party who would benefit from it; and
- would cause detriment — financial or otherwise — if it were applied or relied on.
Common examples include terms that allow one party to unilaterally vary price or scope, that terminate the contract for minor breaches without notice, or that impose broad indemnities only on the customer. Since the Treasury Laws Amendment (More Competition, Better Prices) Act 2022 received Royal Assent on 9 November 2022, proposing or relying on an unfair term is itself a civil penalty provision — not merely a ground for having the term voided.
Misuse of market power — s 46 of the CCA
Outside the ACL itself, s 46 of the CCA prohibits a firm with a substantial degree of market power from engaging in conduct that has the purpose, effect, or likely effect of substantially lessening competition. The section is not confined to specific practices: predatory pricing, refusing to supply a competitor, tying and bundling, and margin squeezing have all featured in enforcement action. A business does not need to be dominant in a traditional sense — a substantial degree of power in any relevant market is sufficient.
How the penalty regime works
The penalties for breaching the civil penalty provisions of the ACL (including ss 18, 21, 29, and 23) and the CCA were increased significantly when the Treasury Laws Amendment (More Competition, Better Prices) Act 2022 came into force on 10 November 2022. The maximum civil penalty for a body corporate is now the greatest of:
- $50 million
- three times the value of the benefit obtained from the contravening conduct (where that value can be determined)
- 30 per cent of the body corporate's adjusted turnover during the breach period (where the value of the benefit cannot be determined)
For individuals, the maximum is $2.5 million per contravention.
These are maximum figures, not starting points. Courts set penalties by reference to the nature of the conduct, the size and financial position of the business, the degree of deliberateness, and the extent of harm caused. However, the increase from a previous cap of $10 million (or 10 per cent of turnover) signals that regulators and courts are expected to calibrate penalties to meaningfully deter large businesses.
Enforcement is split between the regulator and the courts. The Australian Competition and Consumer Commission (ACCC) investigates, can issue infringement notices for defined contraventions, and can commence proceedings. However, it is the courts — not the ACCC — that impose civil penalties and make compensation orders. Private parties who have suffered loss from a contravention can also seek compensation and injunctive relief directly.
Where businesses most commonly come unstuck
Understanding the rules in the abstract is one thing; recognising the risk points in everyday operations is another. The following patterns regularly generate ACL exposure.
Marketing and advertising claims. Environmental claims ("carbon neutral", "plastic-free"), health or performance claims for supplements or fitness programs, and comparative advertising ("we're 40% cheaper than X") all carry substantiation obligations. A claim that cannot be backed by adequate evidence at the time it is made is a false or misleading representation, regardless of whether it turns out to be accurate later.
Pricing presentations. The headline price must be the total price a customer is required to pay, or it must be presented alongside the total price with equal prominence. Mandatory booking fees, credit card surcharges, or compulsory extras that are added later create misleading conduct risk. Similarly, "was/now" or "save $X" pricing requires the reference price to be genuine and recent.
Scarcity and urgency tactics. "Only 3 left in stock" or "offer ends tonight" must be accurate. A countdown timer that resets, or a stock message that doesn't reflect reality, is likely to be misleading.
Standard form contracts. Terms that allow a supplier to vary key deliverables or pricing unilaterally, to terminate on minimal notice without cause, or to exclude liability broadly while imposing wide indemnities on the customer are recurring UCT targets. Since November 2022, including such a term — not just relying on it — can attract a penalty.
Supplier and subcontractor relationships. The UCT regime applies to standard form small business contracts, not only consumer contracts. A business that pushes a template agreement onto a smaller supplier without negotiation may be creating unfair term exposure on both sides of the transaction.
Subscription and free-trial mechanics. Automatic renewal, billing after a free trial, and cancellation barriers are a high-scrutiny area. The key obligations are that these features must be communicated clearly and prominently — not buried in terms that few customers read.
What to do if you identify a risk
If a review of your marketing, pricing, or contracts surfaces a potential issue, acting quickly and transparently is almost always the better path. Practical steps include:
- Correct or remove the inaccurate claim immediately and update the substantiation file before republishing.
- Amend unfair or ambiguous contract terms before they are relied on in a dispute or enforcement action.
- Notify affected customers where the issue has caused them detriment, and resolve complaints promptly.
- Document the changes made and train the relevant team members so the issue does not recur.
If you believe a competitor is engaging in conduct that breaches the ACL or s 46 of the CCA, the appropriate responses range from commercial negotiation to a formal complaint to the ACCC, or commencing proceedings. Which path is right depends on the conduct, the evidence available, and your commercial objectives.
How Artificer Legal can help
Consumer law compliance is not a one-off project — it involves ongoing attention to marketing, contracting, and sales practices as your business grows and evolves. A legal practitioner working through these issues with you will typically:
- Audit your standard form contracts and identify terms that carry UCT risk, with specific recommendations for redraft.
- Review your marketing claims, pricing practices, and any promotional campaigns to flag misleading conduct or substantiation gaps.
- Advise on whether your business has a substantial degree of market power in any relevant market and what that means for your competitive strategy.
- Draft or update your customer-facing agreements, website terms and conditions, and privacy policy to reflect current legal requirements.
- Assist with responding to ACCC investigations, complaints, or court proceedings if enforcement action arises.
Early involvement is almost always cheaper than remediation after a complaint has been filed or media attention has landed.
Key points
Unfair business practices under the ACL cover a broad and interconnected set of obligations. The essentials to carry forward:
- Section 18 prohibits misleading or deceptive conduct in trade or commerce — intent is irrelevant and no-one needs to have actually been deceived.
- Sections 20 and 21 prohibit unconscionable conduct: s 20 tracks equitable doctrine; s 21 extends to broader statutory unconscionability in connection with goods and services.
- Section 29 prohibits specific categories of false or misleading representations, including claims about price, quality, testimonials, and origin.
- Section 23 voids unfair terms in standard form consumer and small business contracts — and since 10 November 2022, proposing or relying on an unfair term is itself a civil penalty provision.
- Section 46 of the CCA prohibits a firm with substantial market power from conduct that has the purpose or effect of substantially lessening competition.
- The maximum civil penalty for a corporation is now the greater of $50 million, three times the benefit obtained, or 30 per cent of adjusted annual turnover — a significant increase from the previous $10 million cap.
- The ACCC investigates and prosecutes; courts impose penalties and compensation orders; private parties can also sue for loss suffered.
If you would like Artificer Legal to review your contracts, marketing practices, or compliance framework, contact us to arrange an initial consultation.