Subscription Contracts Under Scrutiny: Preparing for the Consumer Law Reforms February 23, 2026

Subscription contracts have become a standard feature of modern commerce, underpinning services ranging from digital streaming platforms to meal delivery and software products. Their commercial appeal lies in convenience and recurring revenue. However, features such as automatic renewal provisions and complex cancellation processes have increasingly attracted regulatory attention.

As the Australian Government progresses reforms to the Australian Consumer Law (ACL), this article outlines the current legal framework governing subscription contracts, the proposed changes, and what both businesses and consumers should be aware of moving forward.

The Australian Consumer Law

The ACL is the primary legal framework regulating the supply of goods and services to consumers in Australia. It imposes mandatory obligations on businesses and is enforced by regulators such as the Australian Competition and Consumer Commission (ACCC).

While subscription contracts are not presently regulated under a standalone regime, they must comply with the ACL’s general protections. In 2023, reforms significantly expanded the scope of the unfair contract terms regime, capturing a broader range of standard form contracts and introducing civil penalties for non-compliance. For subscription providers, key obligations include:

• Not engaging in misleading or deceptive conduct or making false or misleading representations;
• Not including unfair contract terms in consumer contracts;
• Ensuring pricing, payment and renewal terms are disclosed clearly and transparently; and
• Preserving consumer guarantees as required by law.

Importantly, the 2023 reforms introduced civil penalties for proposing, applying or relying on unfair contract terms. Each unfair term may constitute a separate contravention, increasing exposure where subscription contracts restrict consumer rights or obscure renewal and cancellation processes.

Unfair Trading Practices – the 2026 Proposed Reforms

The Government has signalled a further regulatory shift by proposing targeted prohibitions on unfair subscription practices as part of broader unfair trading reforms.

Based on current exposure drafts and consultation materials, the reforms are expected to address practices including:

• Subscription models that make cancellation unnecessarily difficult;
• Inadequate or late disclosure of renewal terms;
• Unclear or unilateral pricing changes; and
• Free trial or promotional periods that automatically convert to full-price subscriptions without clear consumer consent.

The proposals also contemplate enhanced and ongoing notice requirements, as well as prohibitions on manipulative online design practices and the late disclosure of mandatory fees.

While these reforms are not yet law, the Government’s regulatory intent is clear. The ACCC has already demonstrated an increased enforcement focus on subscription-based business models, particularly where consumer choice is constrained or obscured.

What should you look out for?

As a subscription provider:

Although the proposed reforms are expected to commence from 1 July 2027, they provide a clear indication of regulatory expectations. Businesses operating subscription models should review their contracts and customer interfaces now, including by asking:

• Is the cancellation process straightforward and easy to locate?
• Can consumers cancel before an automatic renewal takes effect?
• Do any terms restrict or exclude statutory consumer rights?
• Are renewal reminders and pricing disclosures clear and prominent?

Regulators are increasingly scrutinising not just contract terms, but also the clarity and presentation of customer communications.

As a consumer:

The ACL exists to protect consumers from unfair practices. If a subscription term appears unreasonably unfair, misleading or restrictive, consumers may have rights to challenge the arrangement. Complaints can be made to the ACCC, and legal advice may assist in determining available remedies.

Final thoughts

These reforms represent a significant uplift in consumer protections. Subscription businesses should review their terms, interfaces and renewal practices, as the upcoming laws will impose wideranging obligations and heavy penalties for noncompliance. Consumers, meanwhile, can expect clearer information, easier cancellations and greater protection from manipulative design and automaticrenewal traps.