Double trouble – penalties for breaches of competition and consumer laws have increased … again!

The Federal Government has passed new laws doubling the maximum penalty applicable to contraventions of competition and consumer laws by companies under the first limb of the penalty test. The maximum amount for that limb will change from $50 million to $100 million.

The reform means that maximum penalties have increased nearly 100 times for breaches of the Australian Consumer Law (ACL) (from $1.1 million) and 10 times for breaches of competition law (from $10 million) in the space of only eight years. 

The new law came into effect on 28 March 2026 and does not apply retrospectively. Maximum penalties for individuals have not changed.

Application of the new penalty test

The maximum penalty for breaches of competition and consumer laws will now be the greatest of:

1. $100 million;
2. three times the value of the benefit obtained from the illegal conduct; or
3. 30 per cent of the adjusted Australian turnover during the breach turnover period. 

Limbs 'b' and 'c' remain unchanged and may produce a higher figure for large corporations – for instance, 30 per cent of adjusted Australian turnover during the breach period may exceed $100 million for major companies.

In practice, the Court first considers whether it can determine the value of the benefit obtained under limb 'b'. If it cannot, the Court assesses 30 per cent of adjusted turnover under limb 'c' and compares that figure against the $100 million under the first limb. The highest figure is the maximum from which the Court starts before it considers the established penalty factors to determine the applicable penalty for the breach. 

Highest penalties to date all under older regimes

The three largest penalties for breaches of competition law in Australia are as follows: 

• BlueScope Steel – $57.5 million for attempted price fixing of flat steel products.
• Yazaki Corporation – $46 million for cartel conduct in the supply of automotive wire components to the Australian automotive industry.
• Visy – $36 million for involvement in a price fixing cartel. 

These penalties were imposed when the maximum for the first limb of the penalty test was $10 million per contravention.

The three largest penalties for contraventions of the ACL are as follows: 

• Phoenix Institute of Australia – $438 million for unconscionable conduct in misleading students into enrolling in vocational courses they were told were free.
• Australian Institute of Professional Education (AIPE) – $153 million for misleading disadvantaged consumers about ‘free’ courses that incurred VET FEE-HELP debts.
• Volkswagen – $125 million for making false representations about compliance with diesel emissions regulations.

Each of these penalties was imposed under the old ACL penalty regime, which capped the maximum at just $1.1 million per contravention. But given the very substantial volume of breaches – Phoenix Institute of Australia (12,000 affected consumers); AIPE (9,000 affected consumers); Volkswagen (57,000 vehicles) – the court could order significant penalties. 

Billion-dollar fines?

Given that the highest penalties to date are substantial but were under the old penalty regime, it is very likely that breaches of the law under the new penalty regime will see companies being fined hundreds of millions of dollars. 

Indeed, the new maximum means Australia may see its first ever billion-dollar fine before the end of the decade. 

What to do now

The cost of defending or settling legal proceedings can be substantial, but they will be dwarfed by these new maximum fines for breaches of competition consumer law.

It is imperative you immediately:

• review and update compliance programs to ensure they assist to minimise breaches of the law; and
• ensure competition and consumer law training is regular and extends to all staff with exposure to competition and consumer risk.