How the Competition and Consumer Amendment (unfair Trading Practices) Bill 2026 Changes Dispute Risk for Australian Businesses Trading with China

The Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 represents the most significant expansion of unfair trading practices Australia has seen since the Australian Consumer Law (ACL) was enacted as Schedule 2 to the Competition and Consumer Act 2010. For Australian businesses that import from, export to, or operate joint ventures with Chinese counterparties, the Bill introduces a general prohibition on unfair trading conduct, new subscription-transparency rules, and measures targeting dark patterns and drip pricing, each of which materially alters cross-border contract risk. This article provides a practical playbook for in-house counsel, general counsel, and commercial managers: what the reforms change, how they affect Australia–China dispute resolution, and which contract clauses need to be rewritten now.

Executive Summary: Practical Takeaways for Counsel

Before diving into the detail, here are the priority actions that every legal and procurement team involved in Australia–China trade should have on their agenda:

• The new general prohibition is broad. The unfair trading practices Bill introduces a catch-all prohibition on trading conduct that is unfair, going beyond existing misleading-conduct and unconscionable-conduct provisions in the ACL. Industry observers expect the ACCC to use this as a primary enforcement tool within months of commencement.
• Subscription and auto-renewal clauses are directly targeted. Contracts with Chinese platform providers, SaaS suppliers, or subscription-based service agreements must be reviewed for compliance with mandatory cancellation, disclosure, and renewal-consent requirements.
• Drip pricing and dark patterns attract civil penalties. Conduct designed to obscure total pricing or manipulate consumer decision-making, common in cross-border e-commerce, now carries substantial penalty exposure.
• B2B protections are expanding. The Australian Government is consulting on extending unfair-trading protections to small business transactions. Counsel advising SMEs in supply chains should treat this as imminent.
• Five immediate actions: (1) Audit all China-facing contracts for subscription, renewal, and pricing clauses. (2) Rewrite dispute-resolution and jurisdiction clauses. (3) Reassess whether arbitration or litigation best serves enforcement against PRC counterparties. (4) Update supplier onboarding and compliance covenants. (5) Review professional-indemnity and product-liability insurance coverage for regulatory-penalty risk.

What the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 Does

The Bill amends the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010) by inserting a new general prohibition on unfair trading practices. It sits alongside, but is distinct from, the existing prohibitions on misleading or deceptive conduct (section 18 ACL) and unconscionable conduct (sections 20–22 ACL). The practical effect is to lower the threshold for liability: conduct need not be misleading or rise to the level of unconscionability to attract enforcement action or civil penalties.

Key New Prohibitions

The Bill creates three interlocking regulatory layers:

• General prohibition on unfair trading. A person must not, in trade or commerce, engage in conduct that is unfair. The prohibition is framed broadly, drawing on comparable regimes in the European Union and the United Kingdom, and is intended to capture practices that exploit information asymmetry, behavioural biases, or power imbalances.
• Subscription and auto-renewal rules. Businesses that offer subscription-based products or services to Australian consumers must provide clear, upfront disclosure of renewal terms, obtain affirmative consent before each renewal period, and offer a straightforward cancellation mechanism. These rules directly target practices identified in the Treasury exposure draft consultation as causing significant consumer harm.
• Transparency and pricing obligations. The Bill prohibits drip pricing (incrementally adding fees after an initial price is presented) and dark patterns (user-interface designs that manipulate consumers into unintended purchases, subscriptions, or data disclosures). The Treasury consultation materials list specific examples, including pre-ticked boxes, hidden cancellation steps, and misleading countdown timers.

Effective Dates and Application to B2B vs B2C

The Bill’s core consumer-protection provisions apply to conduct directed at consumers as defined in the ACL. However, the Australian Government has separately opened a consultation on extending unfair-trading protections to small businesses in B2B transactions, as detailed on the Treasury consultation hub for small business protections. Industry observers expect this extension to follow within twelve months of the primary Bill’s commencement, effectively widening the net for cross-border supply-chain disputes. For Australian businesses trading with Chinese counterparties, the likely practical effect is that both downstream consumer-facing conduct and upstream procurement arrangements will eventually fall within scope.

How Enforcement and ACL Penalties Change in 2026

The unfair trading practices Bill does not create an entirely new enforcement architecture. Instead, it extends the ACCC’s existing enforcement toolkit, civil penalties, injunctions, declarations, and enforceable undertakings, to the new prohibition. What changes is the breadth of conduct now caught and the resulting increase in enforcement volume that early indications suggest the ACCC is preparing for.

ACCC Enforcement Approach

The ACCC has signalled through its published guidance on unfair business practices that it intends to prioritise cases involving digital platforms, subscription services, and cross-border e-commerce, precisely the categories where Australia–China commercial disputes are most prevalent. The regulator’s established approach involves market studies, compulsory information-gathering notices (section 155 of the Competition and Consumer Act 2010), followed by negotiated undertakings or Federal Court proceedings.

Civil Penalties and Private Actions

Contravention of the new general prohibition will attract civil pecuniary penalties on the same scale as existing ACL contraventions. For bodies corporate, this means the greater of A$50 million, three times the value of the benefit obtained, or 30 per cent of adjusted turnover for the relevant period. For individuals, penalties can reach A$2.5 million per contravention. In addition to ACCC-initiated proceedings, the reforms preserve existing rights for private litigants, including consumers and, where the B2B extension is enacted, small businesses, to bring damages actions and seek injunctive relief in the Federal Court or state and territory courts.

Likelihood of Injunctive and Interim Relief

Early indications suggest that the ACCC will pursue interim injunctions more aggressively under the new prohibition, particularly where ongoing consumer harm is evident. For cross-border disputes involving Chinese counterparties, this raises immediate practical questions about service of process, enforcement of interlocutory orders, and the availability of freezing orders over Australian-held assets.

Specific Risks in Australia–China Supply Chains

The 2026 reforms do not target China specifically, but the practical reality of Australia–China trade means that several categories of conduct commonly seen in this corridor now carry materially higher risk. Understanding these cross-border contract risk factors is essential for any business sourcing from, selling to, or partnering with Chinese entities.

Examples Mapped to Clauses That Commonly Create Exposure

The following practices, each identified in the Treasury exposure draft consultation as examples of unfair trading, are widespread in Australia–China commercial relationships:

• Dark patterns in digital platforms. Chinese-headquartered e-commerce platforms selling to Australian consumers frequently use interface designs that obscure cancellation options, auto-enrol users in premium tiers, or deploy misleading urgency cues (e.g., fake countdown timers, fabricated stock-scarcity warnings). Under the new prohibition, the Australian entity acting as local distributor, licensee, or marketplace operator may bear primary liability.
• Drip pricing in logistics and procurement. Incremental fee structures, where a quoted FOB price progressively expands through undisclosed handling, quality-inspection, certification, or documentation charges, will likely be captured as unfair trading where the total price is not disclosed upfront.
• Subscription auto-renewal in SaaS and digital services. Many Chinese-developed software and platform services used by Australian businesses employ auto-renewal clauses that lack the affirmative-consent and easy-cancellation mechanisms required by the Bill.
• Unilateral contract variation. Standard-form supply agreements from Chinese manufacturers sometimes reserve broad rights to vary specifications, pricing, or delivery timelines without meaningful notice, a practice that is likely to attract scrutiny under the general prohibition.

Real-World Enforcement Friction with Chinese Counterparties

Even where Australian law clearly applies, enforcement against PRC-domiciled entities presents well-documented difficulties. Service of originating process in China requires compliance with the Hague Service Convention (to which Australia and China are both parties), a process that routinely takes six to twelve months. Australian court judgments are not automatically recognised in the PRC, and enforcement requires separate proceedings in a Chinese court, with uncertain outcomes. These frictions make pre-dispute contractual architecture critically important.

Contract Drafting and Clause Playbook for Unfair Trading Practices Australia Compliance

The most effective risk-mitigation strategy for Australia–China commercial disputes arising from the 2026 reforms is to address them at the contract-drafting stage. The following checklist and sample clauses are designed for in-house counsel reviewing existing agreements or negotiating new ones. All sample language is illustrative and should be adapted to the specific transaction and jurisdiction.

Top 10 Clause Changes

1. Compliance warranty. Insert a mutual warranty that each party will comply with the ACL as amended, including the new unfair-trading prohibition.
2. Subscription and renewal terms. Replace any auto-renewal clause with an affirmative-consent mechanism, including minimum notice periods and a plainly accessible cancellation process.
3. Pricing transparency. Require all-inclusive pricing disclosure at point of quotation; prohibit drip-pricing practices expressly.
4. Dark-pattern prohibition. Where digital interfaces are involved, include a covenant that neither party will deploy user-interface designs that constitute unfair trading under the ACL.
5. Audit and records access. Expand audit-rights clauses to cover compliance with unfair-trading obligations, including the right to inspect digital interfaces, pricing algorithms, and renewal systems.
6. Termination for regulatory breach. Add a termination trigger for material breach of the ACL unfair-trading prohibition or the issuance of an ACCC enforceable undertaking.
7. Indemnity for regulatory penalties. Include a specific indemnity covering civil penalties, costs, and losses arising from the counterparty’s unfair-trading conduct.
8. Notice and cure periods. Specify cure periods for identified non-compliance, with escalation to termination if not remedied within a defined timeframe.
9. Governing law and jurisdiction. Reassess whether Australian governing law and jurisdiction, or international arbitration, best serves enforceability (see dispute-resolution clause variants below).
10. Insurance. Require counterparties to maintain adequate insurance covering regulatory-penalty exposure and product-recall costs.

Sample Dispute Resolution Clause Variants

The appropriate dispute resolution clause for China-facing contracts depends on the parties’ risk appetite, the likely value of disputes, and the need for enforceable outcomes in the PRC. The following three variants represent common approaches. Note: these are templates only, adapt to the facts of each transaction and obtain independent legal advice.

Variant A, Australian litigation (lower-risk, Australia-centric supply):

“This Agreement is governed by the laws of New South Wales, Australia. Each party irrevocably submits to the exclusive jurisdiction of the courts of New South Wales and the Federal Court of Australia. The parties consent to service of process by any means permitted under the Hague Service Convention.”

Variant B, International arbitration, seat in Singapore (medium-risk, cross-border enforcement priority):

“Any dispute arising out of or in connection with this Agreement shall be referred to and finally resolved by arbitration administered by the Singapore International Arbitration Centre (SIAC) under its Rules in force at the date of commencement. The seat of arbitration shall be Singapore. The language of the arbitration shall be English. The tribunal shall consist of one arbitrator unless the parties agree otherwise. Either party may apply to the tribunal or to any court of competent jurisdiction for interim or conservatory measures.”

Variant C, Hybrid escalation (higher-value, complex supply chains):

“The parties shall first attempt to resolve any dispute by senior-executive negotiation within 14 days of written notice. If unresolved, the dispute shall be referred to mediation administered by the Australian Disputes Centre (ADC). If the dispute is not resolved within 45 days of the mediation notice, it shall be referred to arbitration administered by the Hong Kong International Arbitration Centre (HKIAC) under its Administered Arbitration Rules. The seat of arbitration shall be Hong Kong. The tribunal shall have power to grant interim relief, including injunctions and preservation orders.”

Supplier Compliance Covenant and Audit Clause

The following sample covenant is designed for insertion into procurement agreements with Chinese suppliers:

“The Supplier warrants and covenants that it will not, in the performance of this Agreement, engage in any conduct that constitutes unfair trading within the meaning of the Australian Consumer Law (Schedule 2, Competition and Consumer Act 2010) as amended from time to time. The Supplier shall, upon reasonable notice, provide the Buyer and its authorised representatives with access to records, digital platforms, pricing systems, and subscription-management interfaces for the purpose of auditing compliance with this covenant. Any material breach of this covenant shall constitute a material breach of this Agreement entitling the Buyer to terminate immediately upon written notice.”

Practical Enforcement Pathways: Australia–China Commercial Disputes

When prevention fails, counsel must choose between Australian court litigation and international arbitration, or a combination of both, to resolve disputes arising from unfair trading practices under the amended ACL. The choice is driven by enforceability, speed, and the location of the counterparty’s assets.

Interim Relief and Urgent Measures

Australian courts can grant freezing orders (Mareva injunctions) and search orders (Anton Piller orders) in support of ACL claims, including claims under the new unfair-trading prohibition. However, the practical utility of these orders against PRC-domiciled respondents is limited unless the respondent holds assets in Australia. For more detail on interim relief in arbitration proceedings, see our guide to interim relief in Singapore-seated arbitration. Where arbitration is the chosen forum, both SIAC and HKIAC rules empower tribunals, and, in urgent cases, emergency arbitrators, to grant interim measures that are enforceable under the New York Convention framework.

Enforcing Awards and Judgments in China

The critical advantage of arbitration over litigation for Australia–China disputes is enforceability. Arbitral awards rendered in New York Convention signatory jurisdictions (including Singapore, Hong Kong, and Australia) are enforceable in the PRC under the Convention, subject to limited grounds for refusal. By contrast, Australian court judgments have no automatic recognition in China. Enforcement requires commencing fresh proceedings in a Chinese court, a process that is slow, uncertain, and subject to potential refusal on public-policy grounds. For guidance on the preliminary step of serving court documents in China, practitioners should ensure compliance with the Hague Service Convention at the earliest stage.

Using Security, Retention of Title, and Letter-of-Credit Routes

Where enforcement risk is high, commercial security mechanisms provide a practical alternative to post-dispute judicial enforcement. Counsel should consider requiring confirmed irrevocable letters of credit (with an Australian advising bank), retention-of-title clauses enforceable under Australian law, and parent-company or bank guarantees from creditworthy PRC entities. These mechanisms are negotiation-intensive with Chinese counterparties but significantly reduce the practical impact of judgment-enforcement difficulties.

Risk Mitigation Checklist and Compliance Programme

The following checklist is designed for legal, procurement, and compliance teams preparing for the commencement of the unfair trading practices Bill:

• Contract audit (immediate). Identify all contracts with Chinese counterparties that contain subscription, auto-renewal, pricing, or digital-interface provisions. Prioritise by revenue exposure and consumer-facing volume.
• Clause amendment programme (within 90 days). Redraft identified clauses using the playbook above. Negotiate amendments with counterparties and escalate where agreement cannot be reached.
• Supplier onboarding update. Revise supplier qualification questionnaires and onboarding checklists to include ACL unfair-trading compliance as a mandatory criterion.
• Training. Deliver targeted training to procurement, sales, and digital-product teams on the new prohibition, with worked examples relevant to Australia–China trade.
• Insurance review. Confirm that professional-indemnity and product-liability policies cover regulatory-penalty exposure and defence costs arising from ACCC enforcement action.
• Internal escalation triggers. Establish a clear internal reporting pathway for suspected unfair-trading conduct by counterparties, with defined escalation to legal counsel and senior management.
• Monitoring. Implement periodic audits of digital interfaces, pricing disclosures, and subscription systems operated by or on behalf of the business.

Worked Example: Hypothetical Australia–China Subscription Dispute

The following hypothetical illustrates how the reforms might play out in practice:

• Scenario: An Australian retailer sources a white-label digital loyalty-platform service from a Chinese SaaS provider. The platform is consumer-facing and includes a premium-tier subscription that auto-renews monthly.
• Issue identified: The cancellation process requires consumers to navigate four screens, enter a reason for cancellation, and wait 48 hours for a “confirmation email” before the cancellation takes effect. The renewal charge is processed immediately upon the renewal date, regardless of whether the consumer has initiated cancellation.
• Regulatory trigger: The ACCC receives consumer complaints and issues a section 155 notice to the Australian retailer. The dark-pattern cancellation process and the absence of affirmative renewal consent are identified as potential contraventions of the new unfair-trading prohibition.
• Contractual response: The Australian retailer invokes its compliance covenant, requiring the Chinese SaaS provider to remediate the interface within 30 days. The provider refuses, citing its standard terms.
• Dispute resolution: The retailer activates the hybrid escalation clause (Variant C above), commencing senior-executive negotiation and then mediation. Mediation fails. The dispute proceeds to HKIAC arbitration, where the tribunal orders interim relief requiring the provider to implement a compliant cancellation process pending final determination.
• Outcome: The retailer avoids ACCC penalties by demonstrating proactive remediation. The arbitral award is enforceable against the provider’s Hong Kong subsidiary under the New York Convention.

Conclusion: Five Immediate Next Steps for Counsel on Unfair Trading Practices Australia

The Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 fundamentally changes the dispute-risk calculus for Australian businesses trading with China. The general prohibition, subscription-transparency rules, and dark-pattern prohibitions create new liability pathways that existing contract terms were not designed to address. Counsel should act now:

1. Audit all China-facing contracts for clauses affected by the new prohibition, subscription, renewal, pricing, and digital-interface terms are the priority.
2. Amend dispute resolution clauses to ensure enforceability against PRC counterparties, arbitration seated in Singapore or Hong Kong is the preferred route for most cross-border relationships.
3. Insert compliance covenants, audit rights, and termination triggers referencing the amended ACL into all new and renegotiated agreements.
4. Update procurement onboarding, supplier qualification, and internal training to reflect the expanded scope of unfair trading practices Australia now prohibits.
5. Review insurance coverage for regulatory-penalty exposure and confirm that defence costs for ACCC enforcement proceedings are covered.

For businesses with significant China trade exposure, the cost of inaction is measurable in penalties, enforcement difficulty, and commercial disruption. The time to restructure contracts and dispute-resolution strategy is before the reforms commence, not after the first ACCC notice arrives. To connect with a specialist practitioner, visit the Global Law Experts Australia lawyer directory.

Sources

1. Parliament of Australia, Bill Digest: Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026
2. Treasury, Exposure Draft Consultation: Unfair Trading Practices
3. Treasury, Consultation: Small Business Protections
4. Australian Competition and Consumer Commission, Unfair Business Practices Guidance
5. Federal Register of Legislation, Competition and Consumer Act 2010