Is Price Gouging Illegal In Australia? Essential Business Compliance Guide

When demand spikes or supply chains get squeezed, it’s natural to revisit your pricing. But there’s a fine line between responsible, transparent price adjustments and behaviour that regulators and customers may view as unfair.

If you’re asking “is price gouging illegal in Australia?”, the short answer is: there’s no single ban that applies to every situation. However, several Australian laws can apply to sharp price increases-especially during emergencies or where customers are vulnerable-so it’s important to understand your obligations and set up your pricing practices the right way.

In this guide, we’ll explain what price gouging is, when it may cross legal lines, which laws can apply in Australia, and the practical steps you can take to price confidently, ethically and in compliance with the law.

What Is Price Gouging?

Price gouging generally refers to raising prices to an unreasonably high level during a period of emergency, unusually high demand, or a supply shortage, where customers have limited alternatives.

Common examples people complain about include dramatic mark-ups on essential goods during a natural disaster, large spikes in supermarket staples during a shortage, or steep increases in fuel following a supply shock.

Because these moments often involve community stress and vulnerability, price gouging quickly attracts regulator interest, media attention and reputational risk. That’s why clarity, documentation and fair processes matter just as much as the price itself.

Is Price Gouging Illegal In Australia?

Australia does not have a blanket, stand-alone law that bans “price gouging” in all circumstances.

However, sharp price increases can be unlawful if they involve misleading or deceptive conduct, false or confusing price representations, unconscionable conduct (especially where vulnerable customers are exploited), or where they breach temporary emergency rules. In some scenarios, competition law risks can also arise (for example, collusion or conduct that misuses market power), though “high prices” alone are not necessarily illegal.

It’s also worth noting the narrower emergency measures Australia has used. During COVID-19, the Federal Government made a specific Biosecurity Determination that targeted the re-selling of certain “essential goods” (e.g. particular PPE items) for excessive mark-ups after retail purchase. This wasn’t a general cap on prices across the economy, but a targeted, time‑limited response aimed at stopping re-sellers exploiting shortages.

The takeaway: there is no universal ceiling on prices. But the way you set and communicate prices-and the context-can bring your conduct within existing laws, especially the Australian Consumer Law (ACL) and temporary emergency directions.

Which Australian Laws Can Apply To Sharp Price Increases?

Australian Consumer Law (ACL)

The Australian Consumer Law (ACL) is the main source of consumer protection in Australia. Several parts of the ACL can be triggered by price-related conduct:

• Misleading or deceptive conduct: Section 18 of the ACL prohibits conduct that misleads or deceives, or is likely to do so. This can include confusing price displays, price “was/now” claims that aren’t genuine, or marketing that creates a false impression about scarcity or discounts. For more detail, see Section 18.
• False or misleading representations about price: Section 29 prohibits false or misleading representations about the price of goods or services, including untrue savings claims or misstatements about fees and charges. You can read more in Section 29.
• Unconscionable conduct: The ACL also bans conduct so harsh or exploitative that it goes against good conscience. In an emergency, exploiting customers’ lack of options or vulnerability with extreme, unjustifiable pricing may be at risk of being unconscionable.
• Component pricing and total price: The ACL requires that the total price be made clear where reasonably practicable. Hidden fees, drip pricing or confusing surcharges can raise compliance issues. If you advertise prices, ensure your display and checkout flows align with advertised price laws.

Emergency Powers And Temporary Measures

Federal and state/territory governments can, in limited circumstances, make special rules for essential goods or services in emergencies. These measures are generally specific and time-limited.

• During COVID-19, a Biosecurity Determination targeted the re-selling of specific “essential goods” acquired from retail for on‑sale at excessive mark‑ups. It did not create a general price cap across the market.
• State and territory fair trading agencies may monitor or investigate price conduct for essentials during declared disasters and may issue guidance or take action under existing consumer law.

Competition Law Considerations

“High prices” by themselves are not necessarily unlawful under competition law. However, risks can arise if competitors coordinate pricing, if there is collusion, or if a business with substantial market power engages in conduct that substantially lessens competition. These issues are fact-specific and separate from general concerns about price levels, so seek tailored advice if your market position or behaviour might raise competition law questions.

Practical Steps To Price Legally And Ethically

Build A Clear Pricing Rationale

• Document your input costs: Keep supplier invoices, freight quotes, exchange rate impacts and other evidence to show how costs have changed.
• Benchmark responsibly: Monitor market rates, but don’t simply follow a competitor up. Your own records should explain the business case for any increases.
• Apply consistent principles: Create an internal pricing policy that explains when and how you adjust prices (e.g., pass‑through thresholds for input costs).

Communicate With Customers

• Be upfront about total prices: Clearly display the full amount payable, including surcharges, to reduce confusion and complaints.
• Explain the “why”: When prices change, a plain‑English note at point of sale or on your website can go a long way to maintaining trust.
• Use accurate “was/now” claims: Sales must reflect genuine previous prices and durations. Keep screenshots and records that support promotional claims.

Tidy Up Your Online And In‑Store Displays

• Ensure price tags, shelf labels and checkout systems match.
• For online stores, align your product pages, cart and checkout with your Website Terms and Conditions and Online Shop Terms and Conditions.

Train Your Team

• Give staff simple scripts explaining price changes and policies.
• Make sure marketing teams understand ACL rules for pricing claims, discounts and comparative advertising.

Prepare For Spikes And Shortages

• Draft an emergency pricing addendum to your pricing policy, so you can move quickly but fairly when input costs surge.
• Monitor government announcements for temporary directions affecting specific products.

Essential Contracts And Policies To Manage Pricing

Good documents won’t set your prices for you-but they make pricing changes easier to implement, explain and defend. Consider the following:

• Terms of Trade: Set out how prices are quoted, when they may change, and how taxes, surcharges and delivery fees are handled. Clear Terms of Trade help manage expectations and reduce disputes.
• Customer Contract or T&Cs: For services or B2B supply, include variation mechanisms, notice periods and indexation clauses so price reviews are predictable. A tailored Customer Contract can also cover lead times and pass‑through of extraordinary costs.
• Website / Online Store Terms: If you sell online, align your checkout and price display practices with your Website Terms and Conditions and Online Shop Terms and Conditions, including how promotions and errors are handled.
• Supply Agreement: Lock in how your own input prices are set and when suppliers can review or increase fees. A robust Supply Agreement helps you justify and forecast downstream pricing.
• Refunds and ACL Compliance: Ensure your policies reflect consumer guarantees (e.g., faulty goods and remedies) and avoid unlawful exclusions. Your online terms should work hand‑in‑hand with your ACL compliance approach.
• Privacy Policy: If you collect customer data (e.g., for waitlists, pre‑orders, promotions), publish an up‑to‑date Privacy Policy that explains how you collect and use personal information around offers and pricing.

Not every business needs every document, but most will need several of these. Getting them tailored makes it easier to apply price reviews fairly and consistently-and to show regulators you’re taking compliance seriously.

Responding To Complaints Or Investigations

Even if you’ve acted in good faith, a sudden price increase can trigger complaints. Here’s a practical approach to keep things on track.

1) Gather Your Evidence

• Collect supplier emails, freight quotes, exchange rate charts, staff rosters and any other cost data that explains the timing and size of your price changes.
• Export website pricing logs, POS audit trails and marketing approvals that show how prices and claims were updated.

2) Review Your Messaging

• Check that your price displays, promotions and “was/now” claims were accurate and supported by records at the time.
• If something was unclear, consider a clarification notice or goodwill gesture to de‑escalate the issue early.

3) Engage Early And Professionally

• Respond promptly to customer complaints with a plain‑English explanation and, where suitable, a practical resolution.
• If contacted by a regulator, cooperate, provide requested documents and focus on clear facts about costs and communications. Where needed, get help from a consumer law lawyer to manage the process.

4) Fix Root Causes

• Update internal pricing checklists, marketing sign‑off processes and document retention so you’re ready next time demand spikes.
• Consider publishing a short “How We Price” page that outlines your general approach to supply chain changes and community impacts.

Key Takeaways

• There is no blanket “price gouging” ban in Australia, but sharp price increases can be unlawful if they involve misleading price claims, false representations, or unconscionable conduct under the ACL.
• Emergency rules may be made for specific products or situations (as occurred under a targeted COVID‑19 Biosecurity Determination), but they are typically narrow and time‑limited rather than general price caps.
• Document the business reasons for any price rise, ensure your total prices are clear, and make promotional claims accurate and supportable.
• Strengthen your contracts and policies-such as Terms of Trade, a Customer Contract, website terms, a Supply Agreement and a Privacy Policy-so you can adjust prices fairly and transparently.
• If complaints arise, respond early, provide records that justify your pricing, and correct any confusing displays or messaging to reduce risk.

If you’d like a consultation on pricing compliance or to update your terms so you can manage price changes with confidence, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no‑obligations chat.