Crackdown nears on ‘dark patterns’ exploiting consumers
Dodgy business practices that lock consumers into hard-to-escape subscriptions or hit shoppers with hidden fees are one step closer to being weeded out.
The federal government has stepped up efforts to prevent consumers from being defrauded, announcing that legislation banning manipulative tactics known as drip pricing and subscription traps will be introduced by the end of next year.
Deputy Minister for Competition Andrew Leigh said in Canberra on Monday that in recent years firms have increasingly exploited “dark patterns” in the world of online shopping to benefit themselves at the expense of consumer understanding.
Businesses have turned the market against consumers by changing digital user interfaces, hiding important information in places shoppers rarely look, and leveraging increased understanding of consumer behavior.
“The result is an environment where consumers not only make decisions, but are guided,” he will say.
Consultations will begin in early 2026 to draft new legislation to ban unfair trading practices that harm consumers by manipulating or distorting decision-making.
Research estimates Australians lose $46 million every year to subscription traps.
To ensure a level playing field, businesses will need to explain important terms before signing up, provide timely reminders at critical points, and make unsubscribing as easy as signing up.
Businesses will also need to disclose any unavoidable fees early and upfront in a transaction; This will make it easier for consumers to compare purchase offers, such as concert fares or airline tickets, before hidden fees such as reservations and baggage affect prices.
As part of the changes, the government will seek to extend consumer protection measures to small businesses, protecting them from unfair behavior by big firms.
“We have heard complaints in the construction industry that large businesses are discouraging small businesses from exercising their legal rights, arguing that it would result in poor commercial consequences,” says Dr Leigh.
“In food manufacturing, we have heard of retailers threatening to delist suppliers in retaliation for price increases to which they are contractually entitled.”
Dr Leigh’s message comes as the Black Friday-Cyber Monday shopping bonanza ends, with businesses trying to lock shoppers into subscriptions with attractive discounts.
The Australian Retailers Association expects Australians to spend a record $6.8 billion during the four-day sales period; This represents a four percent increase over 2024.
The importance of shopping has increased for retailers in recent years; data shows households are increasingly postponing spending for the rest of the year.
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