Alex is Sprintlaw's co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
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Pricing can feel like a constant juggling act. You want to stay competitive, cover costs and grow sustainably - and sometimes it’s tempting to “compare notes” with other businesses in your space.
Here’s the bottom line: in Australia, agreeing prices with competitors can cross a serious legal line. It’s not just risky - in many cases, it’s unlawful cartel conduct with heavy penalties.
In this guide, we’ll explain what price fixing is, when it’s illegal, the grey areas to watch, and practical steps to keep your pricing strategy compliant while still achieving your commercial goals.
What Is Price Fixing (And Why It’s A Problem)?
Price fixing happens when competitors agree to set, control or coordinate prices instead of competing independently. It can be explicit (e.g. “let’s all charge $100”) or indirect (e.g. agreeing minimum discounts, margins or fees, or agreeing how and when to increase prices).
In Australia, competition law expects businesses to compete on price and other terms. When competitors fix or coordinate prices, consumers pay more and market innovation suffers - which is why regulators treat it so seriously.
Price fixing is one type of “cartel conduct.” Other cartel behaviours include bid rigging, market sharing and output restrictions. They all undermine fair competition.
Is Price Fixing Illegal In Australia?
Yes. Price fixing between competitors is prohibited under the Competition and Consumer Act 2010 (CCA). It can be pursued as a civil contravention and, in serious cases, as a criminal offence.
What does that mean in practice? Regulators (primarily the ACCC) can seek court orders that include very significant financial penalties for companies, personal penalties for individuals, disqualification orders for directors, and - for criminal cartel offences - potential jail time.
Importantly, price fixing is “per se” illegal. That means the conduct is unlawful regardless of whether it actually raised prices or harmed consumers in a measurable way. The agreement itself is the problem.
There are limited and technical exceptions (for example, certain joint venture arrangements where the price coordination is reasonably necessary for the venture and properly documented). If you think you might fall into an exception, it’s critical to get tailored legal advice before you act.
Common Scenarios Small Businesses Should Avoid
You don’t need a formal written agreement to fall foul of the law. Even casual conversations, emails, industry group chats or “understandings” can be enough. Be especially careful with the following situations:
- Agreeing a common price list with competitors. If your business and a direct competitor align on fees, hourly rates, base prices, surcharges or “minimums,” that’s classic price fixing.
- Coordinating discount strategies. For example, “we won’t discount below 10%,” “we’ll all end our sale next week” or “let’s increase prices by 5% from 1 July.”
- Sharing sensitive future pricing plans. Swapping information about upcoming price rises, cost pass-throughs or promotional calendars can reduce competition and be risky.
- Industry association discussions that stray into pricing. Associations can be helpful for advocacy and training, but they’re not a safe space to agree or coordinate competitive settings.
- “Gentlemen’s agreements.” An informal “understanding” not to undercut each other - even without a signed contract - can still be an unlawful agreement.
If you’re in doubt, step back and keep pricing decisions independent and internal to your business. It’s fine to monitor the market and set competitive prices - just don’t coordinate the how or when with competitors.
Recommended Prices, Discounts And Promotions: What’s Allowed?
Not all pricing guidance is prohibited. But there are important lines you can’t cross. Here are some common questions we hear from small businesses.
Can I Publish Or Pass On An RRP?
Yes, businesses can provide a genuine recommended retail price (RRP) - but it must be a recommendation only. You can’t apply pressure, incentives or threats to force a retailer to adopt your recommended price. That type of conduct is called “resale price maintenance” and it is generally unlawful.
If you’re setting or communicating RRPs, keep your language clearly optional and avoid any “minimum advertised price” or “you must not discount” rules. For a deeper dive on how RRPs work in Australia, see RRP vs MSRP pricing laws.
Can I Set A Minimum Resale Price For My Stockists?
Generally, no. Resale price maintenance (RPM) - where a supplier tries to dictate the minimum price a reseller must charge - is prohibited. There are limited pathways (e.g. applying to the ACCC for authorisation), but you should assume RPM is off-limits unless you’ve obtained specific clearance.
What About Advertising And Price Promises?
Separate to price fixing, Australian Consumer Law (ACL) rules apply to how you advertise and display prices. You must avoid misleading statements and ensure your price displays are clear and accurate.
- Don’t make false impressions about discounts, savings or “was/now” pricing - see the ACL rules on false or misleading representations.
- Ensure your overall marketing isn’t misleading or deceptive - the general rule in Section 18 ACL applies to offers, sales and promotions.
- Follow price display requirements - for example, total pricing and clarity about fees and surcharges. Practical guidance is covered in advertised price laws in Australia.
Keeping your marketing and display practices compliant is just as important as avoiding coordination with competitors.
Can Small Businesses Bargain Collectively?
In some cases, small businesses can collectively negotiate with a supplier (for example, to get better input pricing) under specific ACCC frameworks. However, collective bargaining is very different from price fixing with competitors and usually requires meeting strict criteria. Don’t assume a group approach is automatically permitted - get advice before taking steps as a group.
How To Manage Pricing Compliance In Your Business
You can maintain a competitive pricing strategy and stay on the right side of the law with some practical guardrails.
1) Keep Pricing Decisions Independent
Make it clear internally that your pricing is set based on your own costs, margins, positioning and market intelligence. Do not ask competitors for their pricing plans or share yours.
2) Set Clear Communication Rules
Train your team about what they can and cannot discuss externally. This includes conferences, industry forums, LinkedIn groups, WhatsApp chats and email chains. If a conversation drifts into pricing with a competitor, they should disengage and record the incident.
3) Review Contracts And Policies
If you’re a supplier, avoid clauses that could be RPM or look like “minimum advertised price” rules. If you’re a reseller, push back on any minimum resale price terms. Ensure your customer-facing pricing rules are reflected transparently in your Terms of Trade and, if you sell online, your Website Terms and Conditions.
4) Refresh Your Marketing And Price Displays
Make sure your promotions, “was/now” comparisons, surcharges and fine print align with the ACL. If you’re running campaigns, have a checklist against the general prohibition on misleading conduct and the specific rules for price representations - see Section 18 ACL and Section 29 ACL.
5) Build A Simple Competition Law Policy
Document a short do’s and don’ts list for pricing discussions and information sharing. Cover what to do if approached by a competitor, how to exit inappropriate discussions, and when to escalate to management or legal support.
6) Be Careful With Industry Associations
Associations are useful, but your representatives should avoid any discussion about current or future prices, margins, discounts or promotional calendars. Meeting agendas and minutes should be tightly managed to keep discussions above board.
7) Seek Advice Early For Collaborations
If you’re considering a joint venture, co-marketing arrangement, or shared distribution model, get legal guidance before agreeing any pricing elements. Some collaborations can be structured lawfully, but it’s crucial to assess the details up front. If you need support navigating consumer and competition issues, our team can help through our ACL Consultation Package.
Handling Investigations, Complaints Or Near Misses
If someone in your business slipped up - say, they shared discount plans in a group chat - act quickly. Preserve records, stop the conduct, document what happened and get advice.
If you receive a complaint or query from the ACCC or a competitor, take it seriously. The right response depends on the facts, but a proactive, well-documented compliance approach will always put you in a better position.
Quick Clarifications: What’s Often Confused With Price Fixing?
- Following a competitor’s publicly advertised prices: Legal. You can monitor the market and set your own prices accordingly - just don’t coordinate with the competitor.
- Using a supplier’s RRP: Legal if it’s genuinely a recommendation. It becomes risky if there’s pressure or rules that prevent discounting (that’s RPM).
- Sales and promotions: Legal - provided your advertising and price displays comply with the ACL (see advertised price laws).
- Joint purchasing on better terms: Potentially legal with the right structure and, in some cases, ACCC clearance. Seek advice before acting as a group.
Penalties And Risk: Why Compliance Matters
Cartel conduct investigations are disruptive and expensive, even if you ultimately avoid liability. If a breach is proven, the consequences are severe. For companies, the court can impose very large penalties. For individuals involved, penalties can include fines, director disqualification and, for criminal cartel offences, imprisonment.
The reputational damage can also be significant - customers and partners value businesses that play fair. A simple internal compliance framework is a small investment compared to the downside risk.
Key Takeaways
- Price fixing between competitors is illegal in Australia - it’s treated as cartel conduct with potentially serious civil and criminal consequences.
- Risky behaviours include agreeing prices or discounts, coordinating price rises, and sharing future pricing plans with competitors (even informally).
- RRPs are allowed as genuine recommendations, but pressuring resellers not to discount can be unlawful resale price maintenance.
- Keep advertising and price displays compliant with the Australian Consumer Law, including the rules on misleading conduct and price representations.
- Protect your business with clear internal rules, training, and compliant written terms like robust Terms of Trade and Website Terms and Conditions.
- If you’re exploring joint ventures or collective arrangements, get legal advice up front - the details matter and there are limited pathways to do this lawfully.
If you’d like a consultation about pricing compliance for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
