Australia’s New Subscription Laws: What Businesses Need To Change Before July 2027

For your customers, signing up for a subscription might take less than a minute. Cancelling can be a very different story.

They may need to search through account settings, read multiple help pages, decline several retention offers or contact a support team during limited business hours. In some cases, they may not even realise they have entered a subscription until an unexpected payment appears on their bank statement.

From 1 July 2027, businesses offering covered subscriptions in Australia will face clearer rules designed to address these kinds of subscription traps.

The reforms will introduce specific requirements for subscription contracts, alongside a broader prohibition on unfair trading practices. For businesses offering subscriptions, memberships, recurring payments or free trials, this means looking beyond the contract itself and reviewing the entire customer journey - from the first advertisement and sign-up process through to renewals and cancellation.

If your business uses a subscription model, now is the time to understand what is changing and start preparing.

Why Are Australia’s Subscription Laws Changing?

Subscription models are not inherently unfair. They can provide customers with convenient, ongoing access to products and services while giving businesses more predictable revenue.

The problem arises when customers do not properly understand what they are signing up for or face unreasonable barriers when they try to leave.

A subscription trap might involve a customer believing they are making a one-off purchase when they are actually agreeing to recurring payments. It could also involve an introductory price that obscures the ordinary subscription fee, a free trial that quietly converts into a paid plan or a cancellation process designed to wear the customer down.

These practices are often connected to what regulators call dark patterns. In simple terms, these are design choices that confuse, steer or pressure customers into decisions they may not otherwise make. This might include preselected options, hidden information, misleading button designs, false urgency or unnecessary steps placed in the cancellation process.

The reforms are intended to address conduct that can cause real harm but does not always fit neatly within existing laws concerning misleading conduct, unconscionable conduct or unfair contract terms. They recognise that the way a website, app or sales process is designed can influence customer decisions even where an individual statement is not technically misleading. 

What Can Happen When Subscription Fees Are Not Clear?

The risks are not only theoretical.

In July 2026, the Federal Court ordered JustAnswer LLC to pay $10 million in penalties after the company admitted making misleading representations about the cost of its online question-and-answer service.

Consumers were told they could use the service for a one-off payment of $2. In reality, they were also being enrolled in an ongoing subscription costing between $45 and $75 per month. JustAnswer was ordered to refund affected Australian consumers and take other corrective and compliance measures. 

The case was decided under laws that already exist. However, it shows why subscription pricing must be communicated clearly and why placing important information somewhere in the fine print may not be enough.

What Will Change From 1 July 2027?

The new framework introduces three key requirements for covered subscription arrangements.

First, businesses offering goods or services under a subscription contract will need to tell customers that the arrangement would be a subscription and provide other prescribed information before the contract is entered into.

Second, businesses will need to give subscribers prescribed information at certain points during the life of the subscription. Regulations will determine much of the detail, including what information must be provided, when it must be given and how it must be communicated.

Third, every cancellation method made available by the business will need to be easy to find, straightforward and limited to steps that are reasonably necessary. An online cancellation method will also be required in certain circumstances. 

Alongside these subscription-specific rules, the broader unfair trading prohibition will target conduct that manipulates consumers or unreasonably distorts the environment in which they make decisions, where that conduct causes or is likely to cause detriment.

Breaches of the new subscription and unfair trading requirements can attract civil penalties under the Australian Consumer Law. This means the reforms are not simply a set of recommended best practices.

Which Subscription Arrangements Will Be Covered?

The definition of a subscription contract is broad. It can include contracts involving recurring or continuing supplies for an indefinite period, fixed-term arrangements that renew automatically and subscriptions that move to a higher price after an initial free or discounted period.

However, not every recurring arrangement will necessarily be covered. The legislation excludes certain contracts and allows further exclusions or circumstances to be prescribed through regulations. Businesses should therefore consider how the legal definition applies to the substance of their arrangement, rather than relying only on the name they give it.

What About Existing Subscriptions?

Businesses should not assume that subscriptions entered into before 1 July 2027 can be ignored.

The specific subscription requirements will apply to contracts entered into on or after that date. They can also apply to earlier contracts when those arrangements are renewed, extended, otherwise continued or varied on or after 1 July 2027, from the date that change takes effect.

The general unfair trading prohibition is concerned with conduct occurring from 1 July 2027, regardless of when the underlying contract was originally entered into. 

This is one reason businesses should review their existing subscriber base, rather than focusing only on new sign-ups.

Customers Must Understand What They Are Signing Up For

Under the new regime, businesses offering covered subscriptions will need to give customers a clear statement that the arrangement would be a subscription, together with other prescribed information.

Much of the detailed information requirement will be set through regulations. However, the broader objective is clear: customers should be able to understand the nature of the arrangement before committing to it. 

In practice, businesses should review whether customers can readily understand:

• What they will pay
• How frequently payments will be taken
• Whether an initial price is temporary
• How long the subscription continues
• Whether it renews automatically
• How and when the customer can cancel

This information should be consistent throughout the entire sign-up process. Advertising, pricing pages, checkout screens, app-store listings, payment pages and Subscription Terms should all tell the same story.

For example, a business might disclose a recurring monthly fee in its Terms and Conditions. However, if its checkout page prominently advertises a low one-off price and makes the ongoing charge difficult to notice, the overall impression may still be problematic.

Are Free Trials And Automatic Renewals Being Banned?

The reforms do not ban free trials, introductory discounts or automatic renewals.

Instead, the focus is on making sure customers understand what will happen next and have a practical way to end the arrangement.

A customer signing up for a 14-day free trial should not be left guessing whether it will convert automatically, when the first payment will be taken, how much they will be charged or what they need to do to cancel.

The legislation also creates obligations to provide subscribers with information during the life of the subscription. Parliamentary materials identify possible notice points such as before a free trial expires, when a subscription renews or when a price changes. However, the final content, timing and delivery requirements will depend on the regulations.

Businesses should begin checking whether their subscription software can identify upcoming trial expirations and renewals, send accurate notices and retain appropriate records showing when those communications were provided.

Cancelling A Subscription Must Be Straightforward

Cancellation is one of the most important parts of the reforms.

Businesses supplying goods or services under qualifying subscription contracts will need to ensure that every cancellation method they make available is:

• Easy to find
• Straightforward
• Limited to steps that are reasonably necessary

This is broader than simply adding a cancellation email address to the Terms and Conditions. The actual customer experience matters.

Consider the process from the customer’s perspective.

Can they find the cancellation option from their account? Are they required to search through a separate help centre? Do they need to call during business hours after subscribing online? Must they provide information the business already holds? Are they repeatedly redirected to discounts and retention offers?

Retention offers are not necessarily unlawful. A business may ask why a customer is leaving or offer them a more suitable plan. The risk increases where those steps become barriers that obstruct or exhaust the customer rather than helping them make an informed decision.

It is also important not to describe the reforms as a universal “one-click cancellation” law. The legislation uses standards such as easy to find, straightforward and reasonably necessary. What those standards require will depend on the subscription and how it is supplied.

However, one thing is clear: cancellation should not feel like an obstacle course.

Your Website And App Design Also Matter

The reforms will require businesses to look beyond their written contracts.

A subscription process may raise concerns where it makes the paid option significantly more prominent than the alternative, preselects a recurring plan, hides the ordinary price behind a temporary discount or uses confusing wording around renewals.

Similar concerns may arise where a business creates false urgency, repeatedly interrupts the cancellation process or makes signing up substantially easier than leaving.

The general unfair trading prohibition is designed to capture conduct that manipulates consumers or unreasonably distorts their decision-making environment. The relevant detriment is not necessarily limited to a direct financial loss. It may also extend to other disadvantages created by the conduct. For subscription businesses, this represents an important shift. Legal compliance will not only be about whether the correct wording appears in a contract. It will also involve how customers are guided through the sign-up, renewal and cancellation process.

The Subscription Rules May Apply To B2B Contracts Too

One less obvious part of the reforms is that the subscription protections can extend to qualifying small-business subscribers.

The rules may apply where the subscription is supplied under a standard-form contract and the subscriber either:

• Employs fewer than 100 people; or
• Had annual turnover below $10 million in the previous income year.

A standard-form contract is generally one prepared by one party and offered on a largely take-it-or-leave-it basis, with the other party having little or no genuine opportunity to negotiate it. This may be particularly relevant to businesses supplying SaaS products, software licences, online platforms, professional memberships and other standardised recurring services.

Not every B2B subscription will be covered. However, providers should not assume that the new subscription requirements only matter where the subscriber is an individual consumer.

The broader unfair trading prohibition has a narrower scope. It does not apply where the customer is a body corporate or acquires the goods or services in the course of carrying on a business. The targeted subscription protections are the part of the new framework that expressly extends to qualifying small-business subscribers. 

Your Contract, Technology And Customer Support Must Match

A business might have carefully written Subscription Terms and still experience legal problems if its systems operate differently.

For example, the Terms may say that a subscription can be cancelled online while the customer’s account directs them to call. The website may promise monthly cancellation while the payment platform creates an annual commitment. A customer may cancel successfully, only for the billing system to continue taking payments.

Problems can also arise where renewal notices show an outdated price, customer support staff give instructions that conflict with the contract or cancellation immediately removes access even though the customer has already paid until the end of the billing period.

Businesses may offer subscriptions through several channels, including their website, an app store, a sales representative or a third-party platform. Each channel may have different processes for billing, renewals and cancellation.

Founders should understand who controls each step and what happens when something goes wrong.

The legal terms, subscription technology and customer experience all need to tell the same story.

What Should Subscription Businesses Do Before July 2027?

Businesses have a 12-month preparation period before the new requirements commence. That time should be used to review both legal documents and operational systems. 

Map the customer journey: Follow the process from the first advertisement through sign-up, trial conversion, renewal, price changes, cancellation and the final payment.

Review what customers see: Check whether recurring payments, billing frequency, introductory prices and renewal arrangements are sufficiently clear across every sales channel.

Test the cancellation process: Ask someone unfamiliar with the business to find and complete the cancellation process. Take note of unclear wording, unnecessary screens and places where the customer could become stuck.

Check existing subscriptions: Identify which contracts may renew, continue or be varied after 1 July 2027.

Review the technology: Confirm that cancellations are recorded correctly, future payments stop and notices can be sent using current prices and dates.

Review the contract: Subscription Terms should properly address payments, renewals, price changes, failed payments, suspension, cancellation, termination, refunds and consumer rights.

Train customer-facing teams. Sales and support staff should understand how the subscription works and provide information that matches the contract and platform.

Keep appropriate records. Businesses should consider retaining evidence of what information was shown at sign-up, when notices were sent, when cancellation was requested and when recurring billing stopped.

Monitor further guidance. Important details will be prescribed through regulations, and the ACCC has received additional funding to provide guidance and education before the reforms commence.

What Laws Apply In The Meantime?

The 1 July 2027 commencement date does not mean subscription businesses can ignore their current practices until then.

Existing Australian Consumer Law rules already prohibit misleading or deceptive conduct and false representations. Consumer guarantees may also apply to the goods or services being supplied, while unfair contract terms protections cover standard-form consumer contracts and qualifying small-business contracts. 

The ACCC has also made subscription traps and other manipulative digital practices an enforcement priority for 2026-27. 

Other legal obligations may apply alongside consumer law. For example, businesses sending promotional emails or SMS messages generally need consent, must identify themselves and must provide a functional unsubscribe option. 

Subscription businesses should also consider how they collect, use and protect customer information. The Privacy Act 1988 does not apply to every small business, but it generally covers organisations with annual turnover above $3 million and certain smaller businesses that fall within specific exceptions. 

Getting Ready For The New Subscription Rules

The new laws are not designed to prevent businesses from offering subscriptions. They are designed to ensure customers understand what they are agreeing to and can leave without being worn down by hidden information, confusing design or unnecessary steps.

For founders, preparing for July 2027 will require more than changing the Terms and Conditions.

Pricing pages, checkout screens, free trials, renewal notices, cancellation journeys, payment systems and customer support processes all need to work together. Reviewing these systems early can help businesses prepare for the new requirements while also creating a clearer and more trustworthy experience for customers.

Where a subscription arrangement is complex, or a business is unsure how the new rules may apply to its existing and future customers, it may be worth having both the contract and the broader customer journey reviewed before the reforms take effect.

If you would like help reviewing your subscription terms, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.