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Get it right or pay the (much higher) price! Increased penalties for Competition and Consumer Law breaches and new penalties for Unfair Contract Terms

Parliament has now passed the much anticipated changes to competition and consumer laws which means businesses will now face higher penalties for breaches of competition and consumer laws and new penalties for unfair contract terms.  

Here is what you need to know and what you need to do to get your business ready.

Maximum penalties increased for competition and consumer law breaches

Under the new changes, higher maximum penalties will apply for breaches of the Competition and Consumer Act 2010 (Cth) including the Australian Consumer Law.

These changes will come into effect upon Royal Assent of the Treasury Laws Amendment (More Competition, Better Prices) Bill 2022 (Bill) which is expected to occur imminently.

These higher maximum penalties will apply to a range of offences including those relating to unconscionable conduct, false and misleading representations, product safety and anti-competitive conduct.

ACCC Chair, Gina Cass-Gottlieb, has warned businesses that "These maximum penalty changes will allow the Courts to ensure that the penalties imposed for competition and consumer law breaches are not seen as a cost of doing business, but rather as a significant impost and something likely to raise attention of owners or shareholders.

New penalties and expansion of the Unfair Contract Terms Regime

The Bill will also introduce new prohibitions and penalties for businesses that include unfair contract terms in standard form contracts with consumers and small businesses.

Businesses will be given a 12 month grace period from Royal Assent to review and update their contracts before these new prohibitions and penalties come into effect for unfair contract terms.

The new unfair contract terms regime will also have a wider scope and will apply to contracts if a party to the contract is a small business that:

  •  employs fewer than 100 persons; or

  • has an annual turnover for the last income year of less than $10 million,

regardless of the value of the contract.

Previously, a court could only declare terms of a contract unfair and therefore void. The Bill will now make unfair contract terms illegal under the Australian Consumer Law and penalties will now be imposed for each breach.  

Under the new changes, each contract term that is unfair will be a separate breach of the Australian Consumer Law. The (now much higher) maximum penalties discussed above will also apply to each breach of these new unfair contract terms prohibitions. 

What you need to do now to get your business ready

The competition and consumer law regulator (the ACCC) is focussed on enforcing the competition and consumer laws and has extensive powers to investigate and take action against businesses and directors for non-compliance (as seen in recent cases commenced by the ACCC).

Failure to comply with Australian competition and consumer laws has serious consequences for businesses and directors, including: litigation, civil and criminal prosecution, class action, disciplinary action and damage to brand reputation – not to mention the now much higher penalties.

Those carrying on business in Australia must take action now to:

  • ensure that their business operations comply with Australian competition and consumer laws; and

  • review and update their standard form contracts to ensure those contracts do not breach the new unfair contract terms prohibitions.

Businesses should also take particular note of the ACCC Compliance and Enforcement Priorities for 2022/2023 which we discussed in our previous article here.

How can we help?

If you need help to review and update your compliance with Australian competition and consumer laws, or if you have already received communication from the ACCC in relation to your practices, it is imperative you obtain advice urgently.

If you require assistance or advice regarding your compliance obligations or any communication you receive from a regulator or enforcement body, please do not hesitate to contact Suzanne Howari or Peter Wright.


The material in this article was correct at the time of publication and has been prepared for information purposes only. It should not be taken to be specific advice or be used in decision-making. All readers are advised to undertake their own research or to seek professional advice to keep abreast of any reforms and developments in the law. Brown Wright Stein Lawyers excludes all liability relating to relying on the information and ideas contained in this article.

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