Is Price Fixing Illegal in Australia?

If you run a small business, you’ve probably had moments where pricing feels like a constant balancing act. You want to stay competitive, cover your costs, and still make a profit - especially when suppliers increase prices or customers are more price-sensitive than ever.

It can be tempting to “compare notes” with others in your industry, particularly if you’re in a tight-knit local market or you regularly see the same competitors at networking events, trade shows, or in industry groups.

But this is where things can get risky. Pricing conversations that seem harmless can cross the line into price fixing - and in Australia, that can lead to serious legal consequences.

Below, we’ll break down what price fixing is, why the law treats it so seriously, and the practical steps you can take to protect your business.

What Is Price Fixing (And Why Does It Matter)?

In simple terms, price fixing is where competitors agree on pricing (or pricing-related terms) instead of independently setting prices.

Price fixing matters because it can reduce competition and harm customers. When businesses don’t compete on price, customers can end up paying more (or getting less value), and newer or smaller competitors may be pushed out of the market.

Price fixing is often discussed as part of “cartel conduct” in Australia. A cartel can involve a range of anti-competitive agreements between competitors, including:

• agreeing on prices (price fixing)
• agreeing who will win a tender or who will bid (bid rigging)
• agreeing to divide customers, territories, or markets (market sharing)
• agreeing to limit production or supply (output restrictions)

Even if your business is small, the rules still apply. Competition law isn’t just for big corporations - it applies across the board.

Is Price Fixing Illegal In Australia?

In general, yes - price fixing between competitors is illegal in Australia and can attract significant penalties.

In Australia, price fixing is regulated under the Competition and Consumer Act 2010 (Cth). The Australian Competition and Consumer Commission (ACCC) is the main regulator that investigates and takes action in this area.

There are limited situations where conduct that might otherwise raise competition concerns can be permitted - for example, if it’s authorised by the ACCC, covered by a notification process, or falls within a specific exemption. But you should get legal advice before assuming any exception applies.

Price fixing can be unlawful whether it’s:

• formal (for example, a written agreement between businesses), or
• informal (for example, a “gentleman’s agreement”, a handshake deal, or a shared understanding reached in conversations)

It also doesn’t have to be an explicit agreement like “let’s charge $99 each.” It can be enough if there is an understanding between competitors about pricing behaviour, such as agreeing:

• not to discount below a certain amount
• to apply the same surcharge
• to raise prices at the same time
• to maintain a certain margin

The key issue is whether you and your competitors are acting independently. If price competition is replaced with coordination, it can trigger serious legal risk.

Does Intent Matter?

Sometimes business owners assume price fixing only applies if you were trying to “do something wrong.” In reality, a lot of competition law risk comes from everyday business conversations that drift into pricing.

You may still be exposed even if your intention was simply to “stabilise the market” or “make sure everyone can survive.”

What About “Suggested Retail Prices”?

Seeing recommended retail prices (RRPs) in the market is common, but how they’re used matters.

A supplier can generally recommend a resale price, but they usually can’t force you to sell at that price. If a supplier pressures resellers to stick to a set minimum price, that can become a separate issue called resale price maintenance (also prohibited in many cases).

This is different to you and your competitors agreeing between yourselves on what price to charge - that’s the classic price fixing risk.

Common Price Fixing Scenarios For Small Businesses

Price fixing doesn’t always look like a “cartel meeting in a boardroom.” For small businesses, it often shows up in day-to-day situations where you’re sharing information with other operators in your space.

1. “Let’s All Charge The Same So We Stop Undercutting”

This is one of the most common (and most risky) situations. It might come up among local service providers, trades, hospitality venues, beauty salons, professional services, or anyone operating in the same suburb.

Even if it feels fair or practical, an agreement to keep prices at a certain level can be price fixing.

2. Discussing Pricing In Industry Groups Or Group Chats

Industry associations and networking communities can be great for learning and support - but price discussions can quickly become problematic.

Red flags include conversations like:

• “What are you charging for this package now?”
• “We’re all putting our prices up by 10% next month, right?”
• “No one should offer free delivery anymore.”

There’s a difference between discussing general business challenges and exchanging current or future pricing intentions with competitors.

3. Coordinating Discounts, Surcharges, Or Fees

Price fixing isn’t only about the headline “price.” It can also cover agreements relating to how you calculate what the customer pays.

For example, agreeing with competitors on:

• a standard cancellation fee
• the same weekend surcharge or credit card surcharge
• a uniform “call-out fee”
• a standard minimum spend

If you’re introducing fees into your pricing model, it’s also worth checking your customer-facing compliance under the Australian Consumer Law (ACL), especially around transparency and fairness. This is closely related to cancellation fees and the way fees are disclosed to customers.

4. “No One Should Offer Refunds” Or “Let’s All Make Deposits Non-Refundable”

Small businesses sometimes try to protect cash flow by tightening refund practices or making deposits “non-refundable.” But if competitors collectively agree to adopt the same approach (for example, agreeing on trading terms that affect the total price a customer pays), you could be creating competition law risk on top of consumer law risk.

Separately, “non-refundable” claims need to be handled carefully under the ACL - in many situations you can’t contract out of consumer guarantees. If you use deposits, it’s important your terms are clear and compliant, including around non-refundable deposits.

5. Tendering Or Quoting Where Competitors “Take Turns”

Another common risk area is when businesses quote for the same job (particularly in construction, trades, events, and procurement-heavy industries).

It can become unlawful if competitors coordinate so that:

• one party “wins” this job and another party “wins” the next
• one competitor submits a deliberately high quote
• businesses agree on the price range they’ll submit

If you’re issuing quotes, it’s also useful to understand what happens once the customer accepts - for many businesses, the big question is whether a quotation is legally binding.

What Are The Penalties And Risks If You Get It Wrong?

Price fixing is treated seriously because it can undermine competitive markets. The consequences can be significant - and they don’t only affect large corporations.

Civil Penalties (For Businesses And Individuals)

Businesses can face substantial civil penalties for cartel conduct (including price fixing), and individuals involved can also face personal penalties.

For corporations, the maximum civil penalty can be the greater of $50 million, 3 times the value of the benefit obtained (if it can be determined), or 30% of adjusted turnover during the breach turnover period. Individuals can also face significant civil penalties.

Beyond financial penalties, an investigation can be disruptive and costly. You may need to:

• respond to regulator requests for information
• produce records, emails, and messages
• engage lawyers to manage your response
• deal with reputational harm (especially in local communities)

Criminal Liability (In Serious Cases)

In some cases, cartel conduct can lead to criminal charges. This is one reason it’s important to take price discussions with competitors seriously, even if the conversation feels casual.

Commercial And Reputation Damage

Even where the legal risk feels “unlikely,” the commercial risk can be real. If customers, suppliers, or industry partners believe your business is involved in anti-competitive conduct, it can harm your brand and long-term growth.

For many small businesses, trust is everything - it’s how you win repeat business, referrals, and long-term contracts.

How Can You Avoid Price Fixing Risk In Your Business?

The good news is that price fixing compliance doesn’t have to be complicated. In practice, it’s about setting clear boundaries around competitor interactions and building good internal habits.

1. Set Prices Independently (And Document Your Reasoning)

Make pricing decisions internally, based on your own costs, strategy, and market positioning.

It can help to keep internal notes that explain why you changed prices (for example, supplier costs increased, rent increased, you changed your service offering). This supports the idea that your decisions are independent and commercially driven.

2. Be Careful When Talking To Competitors

It’s normal to have friendly relationships with other businesses in your industry - especially if you collaborate occasionally or share suppliers. But you should avoid discussing:

• your current prices
• future pricing plans
• discounting strategies
• minimum prices or “price floors”
• who you will (or won’t) supply

If a conversation starts heading in that direction, it’s a good habit to stop it early and change the topic.

3. Make Sure Advertising And Pricing Communications Are Clear

Sometimes, a business isn’t price fixing - but it is accidentally creating a different legal risk by communicating prices in a confusing way.

For example, issues can arise if:

• you advertise a price but add unavoidable fees later
• you display prices without clearly stating if GST is included
• your pricing promotions are unclear or inconsistent

Getting your pricing communications right also helps you comply with the ACL. This includes being careful about advertised price laws and avoiding conduct that could be considered misleading.

More broadly, pricing and promotions are a common trigger for disputes about customer expectations, so it’s worth understanding the Section 18 rules and the elements of misleading or deceptive conduct.

4. Put Customer Terms In Writing (So You Don’t “Standardise” Them With Competitors)

Small businesses sometimes adopt the same cancellation terms, deposit rules, or refund approach as competitors because “that’s what everyone does.”

Instead, it’s safer (and usually more professional) to set your own terms based on your business model, then put them in writing so customers know where they stand.

This can be particularly important if your business relies on bookings, scheduling, or reserved capacity. Clear terms reduce disputes and help you enforce your policies more confidently.

5. Get Advice Before Entering Collaborations With Competitors

Not every interaction with a competitor is illegal. In some situations, businesses legitimately collaborate - for example, where you’re part of a joint venture, shared buying arrangement, or you’re teaming up to deliver a larger project.

However, collaboration needs to be structured carefully so it doesn’t drift into anti-competitive behaviour. This is one of those areas where getting legal advice early can save you a lot of stress later.

If you’re planning any kind of coordination with another business in your space (even if you’re “friendly competitors”), it’s worth checking the boundaries before you roll it out.

Key Takeaways

• Yes, price fixing is generally illegal in Australia and it’s taken seriously under the Competition and Consumer Act (subject to limited exceptions such as ACCC authorisation or notification).
• Price fixing can be informal - it doesn’t need to be in writing to create legal risk.
• Small businesses commonly run into risk through industry group chats, networking conversations, coordinated fees, or tendering arrangements.
• The consequences can include major penalties, investigations, business disruption, and reputational harm.
• A strong practical approach is to set prices independently, avoid pricing discussions with competitors, and document your pricing decisions.
• Clear pricing communication and customer terms also help you stay compliant with the Australian Consumer Law and reduce disputes.

If you’d like a consultation about pricing practices, customer terms, or competition law risk for your small business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.