Leslie Massey
While price gouging is not explicitly illegal in Australia, the government has pledged to crack down on the practice, which involves businesses dramatically increasing the prices of goods and services during crises or emergencies. The Australian Consumer Law (ACL) and sector-specific emergency measures regulate price gouging, and the Australian Competition and Consumer Commission (ACCC) is the primary regulator. Businesses must set prices independently and avoid misleading consumers about pricing, including the reasons for price increases. While high prices are not illegal, certain behaviours, such as price fixing, can be illegal if they harm competition or involve false claims.
| Characteristics | Values |
|---|---|
| Price gouging laws in Australia | There is no stand-alone price gouging law in Australia, but price gouging is regulated through broader legislation, especially the Australian Consumer Law (ACL) and sector-specific emergency measures. |
| Definition of price gouging | Price gouging is when a business dramatically increases the price of goods, services, or essentials, often during a crisis or emergency, well above what's considered reasonable or fair. |
| Examples of price gouging | Inflating the price of face masks or hand sanitiser during a pandemic, or bottled water and groceries during a natural disaster. |
| Legality of price gouging | Charging very high prices is not illegal in Australia, but businesses must not make false or misleading claims about prices or engage in anti-competitive pricing behaviour, such as price fixing. |
| Government action | The Albanese government has pledged to crack down on price gouging by giving the ACCC (Australian Competition and Consumer Commission) more power to investigate concerning pricing practices. |
| Business obligations | Businesses should have a clear pricing strategy, be transparent, and plan for fair pricing, even when demand is high. |
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What You'll Learn
There is no standalone law against price gouging in Australia
In Australia, there is no standalone law against price gouging. Price gouging refers to a business dramatically increasing the price of goods, services, or essentials—often during a crisis or emergency—well above what is considered reasonable or fair. While price gouging is not illegal in Australia, the Australian Consumer Law (ACL) and sector-specific emergency measures regulate it. The ACL, which regulates most business conduct, does not set a maximum price for products but prohibits businesses from acting unconscionably. Courts have interpreted this to include extreme price increases during emergencies.
The Australian Competition and Consumer Commission (ACCC) is the main regulator, and during certain emergencies, the government may issue special rules or directions. For example, during the COVID-19 crisis, the Commonwealth and state governments took action against price gouging for personal protective equipment (PPE) and hand sanitiser. These temporary orders allowed authorities to crack down on anyone reselling items at excessive prices.
Businesses are generally free to set their prices, but they must do so independently of other businesses. Some pricing behaviour is illegal because it harms competition, leading to less choice or higher prices for consumers. Price fixing, where competitors agree on pricing instead of competing, is always illegal. It is also illegal for businesses to make false or misleading claims about prices, including the reasons for any changes.
To stay compliant with price gouging regulations in Australia, businesses should focus on transparency, planning, and fairness in their pricing strategies, even when demand is high. Having a clear pricing strategy that explains how and when prices may change can help businesses communicate clearly and provide evidence if their pricing is questioned.
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Businesses must be transparent about pricing
While price gouging is not explicitly illegal in Australia, businesses must be transparent about their pricing to avoid engaging in unlawful conduct. The Australian Competition and Consumer Commission (ACCC) defines price gouging as a sudden increase in price that is considered too high by consumers. Although businesses have the freedom to set their prices, they must do so independently and avoid making false or misleading claims about prices, including the reasons for any changes.
To ensure transparency, businesses should have a clear pricing strategy that explains how products and services are normally priced and how and when prices may change. This strategy should consider factors such as supply increases and shipping costs, which can impact the final price. By having this information documented, businesses can clearly communicate their pricing policies to their team and customers.
Additionally, it is crucial for businesses to monitor their cost inputs, such as wholesale prices and shipping rates. This monitoring ensures that they can adjust their pricing accordingly and avoid sudden and excessive price increases. Businesses should also be aware of sector-specific emergency measures that may be introduced during crises or natural disasters. For example, during the COVID-19 pandemic, the government issued temporary orders to crack down on the reselling of personal protective equipment (PPE) and hand sanitiser at excessive prices.
To maintain transparency, businesses should also be cautious about how they advertise discounts. The ACCC has expressed concern that some businesses may be misleading consumers by making claims about discounts that are not accurate. By being transparent about pricing, businesses can avoid legal issues and build trust with their customers, which is essential for long-term success.
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Businesses must not mislead consumers about pricing
While price gouging is not explicitly illegal in Australia, businesses must not mislead consumers about pricing. This includes making false or misleading claims about prices and the reasons for any price changes. The Australian Competition and Consumer Commission (ACCC) is the main regulator responsible for monitoring and enforcing these rules.
The ACCC has the power to investigate and take action against businesses that engage in misleading or deceptive pricing practices. This includes making false claims about discounts, as the ACCC has found that a number of businesses may be misleading consumers about the size and scope of discounts. Additionally, it is illegal for businesses to agree on prices among themselves or engage in other anti-competitive pricing behaviour, known as price fixing.
Businesses must set prices independently of their competitors. They should have a clear pricing strategy that explains how products and services are normally priced and how and when prices may change. This helps businesses communicate clearly with their team and provides evidence if their pricing is ever questioned.
During times of crisis or emergency, businesses must be especially careful with their pricing. While the Australian Consumer Law (ACL) does not set a maximum price for products, it prohibits businesses from acting unconscionably, which can include extreme price increases during emergencies. For example, during the COVID-19 pandemic, the government issued temporary orders to crack down on the reselling of personal protective equipment (PPE) and hand sanitiser at excessive prices.
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Businesses must set prices independently of competitors
In Australia, price gouging is not explicitly illegal. Businesses are generally free to set their prices as they see fit, and a price that consumers consider too high is not, in itself, illegal. However, businesses must set these prices independently of their competitors.
Price fixing, where competitors agree on pricing instead of competing, is a form of cartel conduct and is illegal. Businesses must not agree on prices among themselves or engage in other anti-competitive pricing behaviour. The Australian Competition and Consumer Commission (ACCC) investigates and takes action against businesses involved in price fixing and other anti-competitive behaviour.
The Australian Consumer Law (ACL) regulates most business conduct, protecting consumers from misleading or unconscionable conduct. While the ACL does not set a maximum price for products, it prohibits businesses from acting unconscionably, which courts have interpreted as including extreme price increases during emergencies. For example, selling basic necessities at a price much higher than usual during a natural disaster could be considered unconscionable.
Businesses must be transparent and fair in their pricing, even when demand is high. Having a clear pricing strategy that explains how and when prices may change is essential for compliance and communication with customers and regulators.
While there is no formal definition of "price gouging" in Australia, the Albanese government has pledged to crack down on the practice and give the ACCC more power to investigate a broader range of "concerning pricing practices".
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The government can introduce emergency measures
While price gouging is not explicitly illegal in Australia, the government can introduce emergency measures to prevent businesses from taking unfair advantage of consumers during crises. Price gouging refers to when businesses dramatically increase the prices of goods, services, or essentials during emergencies, making them inaccessible to those who need them. During the COVID-19 pandemic, the Commonwealth and state governments intervened to prevent price gouging for personal protective equipment (PPE) and hand sanitiser.
The Australian Consumer Law (ACL) and sector-specific emergency measures help regulate price gouging. The ACL, which regulates most business conduct, does not set a maximum price for products but prohibits businesses from acting unconscionably. Courts have interpreted this to include extreme price hikes during emergencies. For example, retailers selling essential goods at significantly higher prices during natural disasters like bushfires or floods may be deemed to be engaging in misleading or unconscionable conduct.
The Australian Competition and Consumer Commission (ACCC) is the primary regulator responsible for monitoring pricing practices. While businesses are generally free to set their prices, they must do so independently and transparently. It is illegal for businesses to make false or misleading claims about prices or engage in anti-competitive behaviour, such as price fixing with competitors.
To ensure compliance with price gouging regulations, businesses should have a clear pricing strategy that explains how prices are determined under normal conditions and how and when prices may change due to factors like supply or shipping costs. This documentation can help businesses communicate their pricing policies clearly and defend their pricing if questioned by regulators or customers.
The Albanese government has pledged to address price gouging by empowering the ACCC to investigate a broader range of concerning pricing practices. This expanded mandate aims to provide greater protection to consumers and promote fair competition in the market.
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Frequently asked questions
Price gouging is not explicitly illegal in Australia. Businesses can set their prices as they see fit and sudden price increases are not considered unlawful. However, businesses must not make false or misleading claims about prices or engage in anti-competitive behaviour that harms competition and leads to higher prices for consumers.
Price gouging is when a business dramatically increases the price of goods, services, or essentials during a crisis or emergency, making it difficult for consumers to access necessary goods. While there is no formal definition of price gouging in Australia, it is often seen as unfair and may be considered unlawful conduct if it harms competition or misleads consumers.
Examples of price gouging include increasing the price of face masks, hand sanitiser, or personal protective equipment (PPE) during a pandemic, or raising the cost of bottled water, groceries, or other household necessities during a natural disaster or emergency.
