Unfair trading practices protections for small businesses - Federal Government seeks feedback
Introduction
On 3 June 2026, the Federal Government published a Consultation Paper on unfair trading practices protections for small businesses.
The Consultation Paper’s release follows the introduction of the Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026 (Bill) into Parliament. The Bill proposes new general consumer protection against unfair trading and subscription practices.
The Consultation Paper is accepting responses until 10 July 2026, seeking feedback on whether proposed unfair trading practices protections should be extended to or modified for small businesses and franchisees.
In the below article, we summarise the Consultation Paper’s discussion points and key proposals under the Bill.
Policy Proposal – small businesses as consumers
The proposal observed that there are over 2.6 million small businesses in Australia, making up more than 97% of businesses in Australia.
Past consultations by Treasury revealed that when acquiring goods or services from larger businesses, small businesses face many of the vulnerabilities experienced by consumers. These vulnerabilities can be exacerbated for small business owners from linguistically or culturally diverse backgrounds. Like consumers, the proposal asserts small businesses may experience power imbalances and information asymmetries. Examples provided by stakeholders include practices designed to get small businesses to agree to unfair contract terms, practices dissuading small business owners from exercising their legal rights and failing to disclose changes to a product.
To combat these issues, the proposal is to extend the proposed consumer general prohibition on unfair trading practices to also protect small businesses where they acquire goods or services as a consumer.
The proposed general consumer prohibition on unfair trading practices will prohibit conduct associated with the supply of goods or services to a consumer that is or is likely to:
manipulate the consumer or unreasonably distort the environment in which the consumer makes, or is likely to make, a decision; and
cause detriment (financial or otherwise) to the consumer.
The proposed prohibition provides a ‘grey list’ of conduct that may constitute a contravention.
The proposed grey list items include:
impeding the consumer’s ability to exercise legal rights, or seek legal remedies;
failing to disclose material information to the consumer;
disclosing material information to the consumer in a complex, ineffective, unclear, unintelligible, ambiguous, untimely or overwhelming way; and
creating an environment (including by using design elements in digital interfaces) which places the consumer under unreasonable pressure in relation to, or obstructs the consumer from, making or fulfilling the consumer’s decision.
Under the proposed prohibition, the scope of relevant goods or services would continue to be limited to those acquired as a consumer under section 3 of the Australian Consumer Law.
This means that small businesses would only be protected where the amount payable for the goods or services is under $100,000, or the goods or services were of a kind ordinarily acquired for personal, domestic or household use or consumption, or the goods consisted of a vehicle or trailer acquired for use principally in the transport of goods on public roads.
The Bill proposes to define small businesses as a business that has fewer than 100 employees, or makes less that $10,000,000 in annual turnover.
The Consultation Paper invites discussion on further examples for the grey list, the definition of a small business, and if the proposed prohibition should be extended to also protect small businesses where they acquire goods or services as a consumer.
Policy Proposal – Business-to-business dealings
The Consultation Paper discusses existing legislation that assists in protecting small businesses in business dealings, including the Australian Consumer Law.
The Consultation Paper reviewed stakeholder opinion on whether protections under the Australian Consumer Law were sufficient for small businesses. In previous consultations, the paper reports that stakeholders had raised concerns over inadequate protections from unfair business practices, including unfair subscription practices.
To combat these issues, the Consultation Paper seeks feedback on the Bill’s proposed protection from unfair subscription practices.
These reforms would require businesses offering subscriptions to disclose material information prior to customers signing up for a subscription, notify customers at key points of the subscription, and remove barriers to cancellation.
These protections would be provided to small businesses where a subscription is entered into under a standard form contract, and the small business either has less than 100 employees or an annual turnover of less than $10,000,000.
The Consultation Paper invites responses as to what types of unfair trading practices are occurring in business-to-business dealings, what factors affect whether a small business is likely to be harmed by unfair trading practices in business-to-business dealings, and how small businesses would respond to an economy-wide unfair trading practices prohibition that applies to business-to-business conduct.
Conclusion
The Consultation Paper provides public consultation until 10 July 2026. The paper can be accessed via the link here. Once the consultation process concludes, Treasury expects to develop a Decision Regulation Impact Statement to inform government decision making on the finalisation of the reforms.
Please contact Alicia Hill if you wish to discuss this article further.
If you have any queries please contact:
Alicia Hill
Principal
T: +61 3 9611 0180 | M: +61 484 313 865
E:ahill@sladen.com.au
This article was prepared with the assistance of Chris Downes, Law Clerk.
