Price Gouging Laws In Australia: How To Stay Compliant

When demand suddenly spikes - think bushfires, floods or supply chain shocks - prices can move fast. As a business owner, you still need to cover your costs and stay profitable, but there’s a line between fair market pricing and conduct that regulators may treat as “price gouging.”

In Australia, there isn’t one standalone “price gouging law.” Instead, your pricing conduct is assessed under broader consumer laws and, at times, temporary emergency rules. In this guide, we’ll explain how price gouging is treated under Australian law, what regulators look for, and practical steps to stay compliant and protect your reputation.

Let’s get you clear on the rules so you can price confidently - even in uncertain times.

What Is Price Gouging?

Price gouging generally refers to dramatic and opportunistic price increases for goods or services that people need urgently, often during an emergency. Examples include inflating prices for bottled water during a natural disaster, or essential health products during a pandemic.

By itself, a higher price isn’t unlawful. Markets adjust to supply and demand, and your costs can genuinely rise. The legal risk appears when pricing goes well beyond what is reasonable in the circumstances, especially if consumers are vulnerable or the product is essential.

How Is Price Gouging Regulated Under Australian Law?

Australia doesn’t set maximum prices for most goods. Instead, conduct that looks like price gouging can be captured by general consumer law rules and, in some cases, temporary emergency measures.

Australian Consumer Law (ACL)

The Australian Consumer Law (ACL) prohibits certain conduct that may arise in a price spike, including:

• Misleading or deceptive conduct (section 18) - for instance, suggesting a price rise is due to a “regulatory requirement” or “mandatory levy” when it isn’t. See a detailed overview of section 18.
• False or misleading representations (section 29) - such as making false statements about the usual price, discounts, or the reason for a price change. Read more about section 29.
• Unconscionable conduct (sections 20–22) - where pricing takes advantage of consumers in a way that’s against good conscience in the circumstances, especially during emergencies. See how section 21 is applied.

The ACCC (Australian Competition and Consumer Commission) enforces the ACL. It can investigate and, where appropriate, negotiate undertakings or commence court action. Courts - not the ACCC - can impose penalties, order injunctions and, in some cases, order corrective notices or consumer redress.

Emergency-Specific Measures

During certain emergencies, the Commonwealth or states and territories may introduce temporary rules to restrict price gouging on specified goods. For example, in 2020, emergency measures under health and biosecurity laws targeted reselling essential items like hand sanitiser and certain personal protective equipment at excessive mark-ups.

These measures are time-limited and targeted. If you sell essentials that tend to spike in demand during crises, keep a close eye on official announcements during emergencies.

What’s The Difference Between Fair Pricing And Price Gouging?

Prices can rise lawfully when your costs increase (e.g. wholesale prices, freight, insurance), when supply is constrained, or when you reposition a product. That’s normal market behaviour.

Pricing risk grows when a business sets prices far beyond what is justified by actual costs or market conditions and consumers have limited alternatives. Regulators and courts may consider factors like:

• How the new price compares with your usual price and margin.
• Whether the product is essential (e.g. food, fuel, medical supplies).
• Whether demand surge is linked to an emergency or crisis.
• Whether you can show a genuine cost basis for the increase (supplier invoices, transport costs, shortages).
• Any statements or marketing that could mislead consumers about the reasons for the change (see common issues under advertised price laws).

As a rule of thumb: if you can’t document a real, proportionate rationale for your price change, the risk of an ACL issue increases - especially for essential goods during a crisis.

What Happens If You’re Accused Of Price Gouging?

If concerns are raised, the ACCC can request information, issue public guidance, and in serious cases, take court action. Outcomes can include penalties, injunctions to stop conduct, and orders requiring corrective notices or consumer redress. Courts, not the ACCC, determine these outcomes.

Reputational harm can be just as damaging. Media coverage, social posts, or online reviews about “price gouging” can spread quickly. For small businesses, prompt, transparent engagement and robust records can make all the difference.

How To Stay Compliant: Practical Steps For Your Pricing

Staying on the right side of the rules is about transparency, evidence and consistency. These steps will help you put good practice on record.

1) Write (And Use) A Clear Pricing Policy

Document how you set prices under normal conditions, who approves changes, and when prices may move (e.g. supplier increases, freight surcharges, scarcity). Many businesses embed this approach in their customer-facing pricing terms or general Terms of Trade, so expectations are clear.

2) Track Your Cost Inputs In Real Time

For essential goods, closely monitor wholesale prices, shipping, insurance, and labour. Keep invoices, supplier emails and freight quotes. If you do increase prices, record a short note and attach the evidence behind the decision. If a regulator asks, you’ll be able to demonstrate your rationale quickly.

3) Be Careful With Advertising And Messaging

Avoid statements that could mislead customers about pricing, discounts, “usual price” comparisons or why a price moved. Your website and in-store signage should align with the ACL, including the rules on advertised pricing. If you pass on a temporary surcharge, explain it clearly.

4) Avoid Artificial Scarcity Or “Holdback” Tactics

Withholding stock to drive prices higher or creating scarcity when you have supply on hand can contribute to an unconscionable conduct risk - particularly during emergencies. If you need to limit quantities, set fair per-customer limits and communicate restocking timelines where possible.

5) Stay Alert To Emergency Measures

Keep an eye on government announcements during crises. If new rules restrict pricing for certain goods, enforce them internally straight away and update signage or checkout rules accordingly.

6) Train Your Team

Make sure staff understand how pricing is set, who can approve changes, and what they can say to customers. Provide them with a short script for common questions and a process to escalate tricky issues (e.g. media enquiries or regulator contact).

7) Maintain Strong Supplier Relationships

Reliable supply reduces pressure to hike prices. Use a written Supply Agreement that sets expectations on pricing adjustments, lead times and shortages, so you can manage risk proactively.

8) Build Consumer Law Compliance Into Your Everyday

Beyond pricing, ensure your returns, descriptions and guarantees meet ACL standards. Your internal playbook should cover section 18 (misleading or deceptive conduct), section 29 (misleading representations) and unconscionable conduct.

What Legal Documents Should You Have In Place?

The right documents help you explain prices to customers, set expectations with suppliers, and prove your decision-making if questioned.

• Terms Of Trade or Customer Terms: Set out how prices are displayed, when they can change, surcharges, and customer rights. This can sit alongside or within your standard Terms of Trade.
• Supply Agreement: Clarifies how supplier price increases, shortages and lead times are handled, plus how and when you can renegotiate. A tailored Supply Agreement also supports your documentation when prices move.
• Website Terms & Conditions: If you sell online, include pricing, discounts, taxes and checkout rules in your Website Terms & Conditions, and keep them consistent with your product pages and marketing.
• Privacy Policy: If you collect customer data (orders, accounts, loyalty programs), you need a compliant Privacy Policy explaining how you handle personal information.
• Employment Contracts & Policies: If you have staff, your Employment Contract and staff handbook should explain who can change prices, who can speak to media/regulators, and how to handle customer complaints.

Not every business needs every document, but most will benefit from a mix of customer terms, supplier contracts and clear internal policies. Well-drafted documents also help you avoid inconsistent messaging that can spark complaints.

What To Do If Your Pricing Is Challenged

It happens. If a customer or regulator questions a price rise, act quickly and transparently.

1. Collect your records: Pull purchase invoices, freight quotes, staff emails and your internal pricing note. A clear paper trail is your best defence.
2. Respond promptly and factually: Engage constructively with enquiries. If the ACCC contacts you, provide accurate information and stick to the facts.
3. Review your messaging: Check that product pages, labels and promotional material match your current pricing and don’t overstate discounts or “usual” prices.
4. Adjust if needed: If you spot a genuine error or miscommunication, fix it quickly and update your internal process so it doesn’t recur.

If the situation is complex or you’re unsure about your obligations, getting early legal guidance can help you resolve the issue and reduce risk.

Key Takeaways

• Australia doesn’t have a single “price gouging law,” but extreme pricing conduct can breach the ACL - particularly if it’s misleading, false or unconscionable during emergencies.
• The ACCC investigates and may take court action; courts decide penalties, injunctions and any consumer redress, not the ACCC directly.
• Fair price increases should be supported by evidence of real cost changes or supply issues - keep strong records to justify decisions.
• Embed compliance into everyday operations with clear customer terms, a robust Terms of Trade, reliable supplier contracts and staff training.
• Be transparent with customers, avoid misleading messaging about “usual prices” or reasons for increases, and make sure your online pricing aligns with your website terms.
• During emergencies, watch for temporary restrictions on specific goods and update your processes immediately if new rules apply.

This article is general information, not legal advice. If you would like a consultation on price gouging laws and compliance for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.