For many startups and growing businesses, compliance can often take a back seat to product development, marketing, and growth. Yet, understanding and complying with the Australian Consumer Law (ACL) is essential to avoid costly penalties and reputational damage — especially as the ACCC ramps up enforcement across digital, eCommerce, and service-based sectors.
This guide breaks down what the ACL means for your business, common compliance pitfalls, and how to protect your startup from risk.
What Is the Australian Consumer Law (ACL)?
The Australian Consumer Law, found in Schedule 2 of the Competition and Consumer Act 2010 (Cth), is designed to protect consumers and promote fair trading across Australia. It applies to all businesses, including startups, regardless of size or industry.
The ACL governs key areas such as:
- False or misleading representations
- Unconscionable conduct
- Consumer guarantees
- Product safety standards
- Unfair contract terms
If your business sells goods or services to individuals or small businesses, or markets itself to Australian consumers, the ACL likely applies to you.
Key Compliance Obligations for Businesses
1. Avoid Misleading or Deceptive Conduct
Your marketing, sales, and promotional materials must not mislead or deceive consumers. This includes your website copy, product descriptions, testimonials, pricing, and even social media posts.
Example: A SaaS startup advertising “unlimited access” must ensure the service truly has no usage caps or hidden restrictions.
2. Honour Consumer Guarantees
Under the ACL, consumers are entitled to certain guarantees when they buy goods or services, such as that products must be of acceptable quality, fit for purpose, and match their description.
If your product or service fails to meet these guarantees, consumers are entitled to a repair, replacement, or refund.
3. Avoid Unfair Contract Terms
Standard-form contracts — such as your Terms and Conditions, User Agreements, or Subscription Contracts — must not contain unfair terms.
The 2023 reforms to the ACL made unfair contract terms illegal, not just voidable, meaning penalties can now apply.
4. Ensure Accurate Pricing and Promotions
Any price you advertise must be clear, truthful, and inclusive of all fees. “Was/Now” pricing, limited-time offers, or discounts must reflect genuine savings.
5. Meet Product Safety and Labelling Requirements
If you sell physical products, especially in categories like electronics, toys, or cosmetics, you must comply with mandatory product safety standards and recall obligations.
Common ACL Traps for Startups
Startups often unintentionally breach the ACL due to rapid scaling, automation, or aggressive marketing. Common risk areas include:
- Subscription models with unclear cancellation terms.
- Refund policies that contradict consumer guarantees.
- Influencer or affiliate campaigns without proper disclosure.
- Software or app disclaimers that attempt to limit liability beyond what’s legally permitted.
- Comparative advertising that could mislead consumers.
Even if a breach is unintentional, penalties can be severe — up to $50 million or more for corporations, and $2.5 million for individuals.
Recent ACCC Enforcement Trends
The Australian Competition and Consumer Commission (ACCC) has been increasingly active in investigating digital and online businesses. Recent focus areas include:
- False or misleading environmental claims (“greenwashing”).
- Manipulative UX patterns or “dark patterns” in apps and eCommerce sites.
- Unfair contract terms in B2B SaaS and platform agreements.
- Misleading subscription or auto-renewal practices.
This means startups, scaleups, and digital-first businesses are squarely in the regulator’s sights.
How to Stay Compliant
- Review Your Contracts and Terms Regularly
Ensure your standard form agreements are up to date with the latest ACL and unfair contract term reforms. - Audit Your Marketing and Sales Practices
Review your advertising, website, and promotional materials for accuracy and transparency. - Train Your Team
Educate your marketing, sales, and customer support teams on what constitutes misleading or deceptive conduct. - Implement Clear Refund and Warranty Policies
Your refund policies must comply with the ACL and not mislead consumers about their rights. - Seek Legal Advice Early
An experienced commercial lawyer can help identify compliance gaps before they turn into regulatory or reputational risks.
Final Thoughts
Consumer law compliance isn’t just about avoiding penalties — it’s about building trust with your customers. For startups, that trust can be one of your most valuable assets.
At Allied Legal, we help founders and growing businesses review contracts, marketing materials, and internal policies to ensure ACL compliance while supporting your commercial goals.
