Australia Just Passed a Subscription Law With $100M Penalties for a Bad Cancel Flow

Every compliance story we've covered this year — the FTC's rule getting vacated on a technicality, the EU's withdrawal button, Colorado quietly pulling B2B contracts into its cancellation law — has one thing in common: the penalties, where they exist at all, are modest by global-tech standards. Australia just broke that pattern. The Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 passed federal parliament on July 2, 2026, and it puts a subscription cancellation flow inside a penalty regime that tops out at nine figures.

The Act does two things at once, and it's worth separating them because they land on different timelines. First, it creates a general, standalone prohibition on "unfair trading practices" — conduct that manipulates a consumer, distorts the environment in which they make a decision, or causes them detriment, even where no specific existing rule was broken. Second, layered on top of that general ban, it writes a detailed, subscription-specific regime directly into the Australian Consumer Law: disclosure obligations before signup, mandatory notice before a trial converts, cooling-off periods, and a requirement that cancelling has to be no harder than subscribing in the first place. Both take effect July 1, 2027. Neither is in force yet. But treating that date as "nothing to do until then" misses what the ACCC has already been doing under the law that's already on the books, which we get to below.

Where Australia sits next to the FTC, the EU, and Colorado

We've covered three other cancellation-flow frameworks this year in detail: the FTC's click-to-cancel rule, still stuck in rulemaking after a court vacated it on a procedural technicality; the EU's withdrawal button, live since June 2026 but scoped narrowly to the first 14 days after signup; and Colorado's B2B-reaching auto-renewal law. Australia's Act borrows pieces of all three and adds something none of them have: a penalty ceiling that actually changes the math for a large company deciding whether a bad cancellation flow is worth fixing.

Sources: Federal Register of Legislation C2026A00064; Directive (EU) 2023/2673 implementing guidance (2026); CO SB25-145 as tracked by Perkins Coie and Ogletree.

The AU$100 million figure isn't a number the drafters invented specifically for subscriptions — it's the same doubled maximum penalty the Australian Consumer Law now applies broadly to unfair contract terms and misleading conduct, and the new Act simply folds unfair trading practices, including the subscription-specific rules, into that existing ceiling. Individuals involved in a contravention face up to AU$2.5 million personally, separate from whatever the company pays, plus courts retain the ability to order injunctions, compliance programs, and adverse publicity orders on top of the fine itself.

What the subscription-specific rules actually require

Buried inside the general unfair-trading prohibition is a detailed subscription regime that reads like a checklist someone wrote after looking at exactly the dark patterns we've documented elsewhere on this site. Three requirements do most of the work:

• Pre-subscription disclosure. Key terms — price, what renews, how to cancel — have to be disclosed clearly before the customer signs up, not buried in a terms-of-service link they never open.
• Trial-end notification. Businesses must notify the customer before a free or discounted trial converts into a paid subscription, giving them a real window to decide rather than discovering the charge after it's already posted.
• Cancellation no harder than sign-up. This is the FTC's and Colorado's core requirement, transplanted into Australian law almost verbatim — if a customer could subscribe in two clicks online, cancelling can't require a phone call, a support ticket, or a maze of retention screens.

On top of those three, the Act introduces a default 14-day cooling-off period that applies at three specific moments: when a new subscription begins, at the first billing cycle after a free or discounted trial ends, and at the start of any further subscription agreement running 12 months or longer. That third trigger is the one most US and EU frameworks don't have an equivalent for — it means an annual-plan renewal in Australia can carry its own fresh 14-day cooling-off window, not just the initial signup.

The ACCC isn't waiting until 2027

On February 19, 2026, the ACCC published its 2026-27 compliance and enforcement priorities and named unfair contract terms — with subscription traps called out explicitly: silent auto-renewals, harsh early-termination fees, and non-cancellation clauses — as one of them. That announcement predates the new Act's commencement date by nearly a year and a half, and it's built entirely on the unfair contract terms regime that's already enforceable today.

The ACCC has already shown it will act on this. The Federal Court ordered JustAnswer LLC to pay AU$10 million in penalties in 2026 after finding the company had misled Australian consumers into believing they could use its online question-and-answer service for a one-off AU$2 charge, when in fact they'd been signed up to a recurring monthly subscription — plus separate findings that JustAnswer falsely implied an affiliation with the Fair Work Ombudsman. Consumers who were misled between November 2022 and August 2025 are entitled to refunds on top of the penalty. Separately, the ACCC is investigating a case involving more than 100,000 subscribers who were allegedly charged despite having already cancelled. Neither case waited for the new Act — both ran under law that's on the books right now.

That last figure in the chart is the one worth sitting with longer than the penalty numbers. Ninety percent of people who'd just had a bad time cancelling still said they'd come back if the process had been easy. A cancellation flow that lets people leave without a fight isn't just a compliance checkbox — it's the difference between losing a customer for good and losing them for one billing cycle, something we've made the entire case for in our Stripe cancellation flow guide.

Does this actually reach B2B SaaS?

Partially, and the split is worth understanding precisely rather than assuming either "yes, everything" or "no, we're B2B so we're fine." The new Act's unfair trading practices prohibition — the general ban, plus the subscription-specific disclosure and cooling-off rules built on top of it — applies only where the customer is a consumer. A subscription sold to a company acquiring it in the course of running a business sits outside that prohibition, the same carve-out the EU's withdrawal button uses.

But Australia already has a second, older mechanism that doesn't carry that carve-out the same way: the unfair contract terms regime, in force since 2023's penalty amendments, which extends to small business contracts — defined as a business with fewer than 100 employees or under AU$10 million in annual turnover, with no ceiling on the contract's dollar value. Auto-renewal clauses, cancellation barriers, and early-termination fees written into a standard-form contract can already be challenged as unfair under this regime if you're selling to small Australian businesses, regardless of what the 2027-commencing Act eventually adds. If your SaaS runs self-serve signup with a business option and doesn't distinguish "small business" from "consumer" anywhere in its terms, that's the gap worth checking now — not in 2027.

What to check before July 2027

None of this requires waiting for the commencement date to start fixing things, especially since the ACCC's current enforcement priority is running on law that's already active:

1. Confirm your cancel path is genuinely no harder than signup. Same test the FTC and Colorado apply — if signup takes one click through a hosted checkout, cancellation can't route through a support queue or a scheduled call.
2. Disclose renewal terms before the click, not after. Price, what renews, and how to cancel need to be visible during signup, not just in a terms-of-service link nobody opens — this is what the ACCC's "drip pricing" enforcement thread is specifically watching for.
3. Send a real trial-end notice. A webhook off your trial-conversion event into an email is a small build if you don't already have one, and it directly answers the Act's trial-notification requirement.
4. Audit your small-business terms today, not in 2027. If you sell to Australian businesses under the 100-employee / AU$10M turnover threshold, unfair contract terms law already applies to your auto-renewal and cancellation clauses right now.
5. Never require a mandatory reason field to complete a cancellation. The same obstruction pattern that's landed US companies in FTC enforcement actions is exactly what the ACCC is naming as a subscription trap.

Nine-figure penalties get attention, but the more useful number in this story might be the 90% repurchase-intent figure from the CPRC data — it's a reminder that the compliance work and the retention work here are the same work. A cancellation flow built to let someone leave in one step, with a single non-blocking offer instead of a gauntlet, satisfies the letter of what Australia is now requiring and happens to be the same design that saves 25–40% of subscribers who try to leave in the first place. CancelFlow is built around exactly that shape — no mandatory reason gate, one offer instead of a sequence of them, and a cancel action that always completes when the subscriber wants it to, whether they signed up as an individual or as a small business under the threshold Australia's regulators are now actively watching.

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