Breaking Up Is Hard to Do: eHarmony and Australia's new unfair trading practices rules

What you need to know

• The Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 (Cth) (the UTP Act) commences on 1 July 2027, introducing a general prohibition on unfair trading practices (UTP) alongside dedicated subscription contract provisions and enhanced drip pricing protections.
• Contraventions by corporations will attract civil pecuniary penalties of the greater of $100 million, three times the benefit obtained, or 30% of adjusted turnover. This represents a significant uplift from the position under section 18 of the Australian Consumer Law (contained in Schedule 2 to the Competition and Consumer Act 2010 (Cth)) (ACL), which does not carry civil pecuniary penalties.
• Subscription practices will face particular scrutiny under the new regime. Businesses offering subscriptions must provide clearer disclosures, send renewal notices before subscriptions renew or free trials expire, and offer consumers a straightforward cancellation process.
• The recent eHarmony decision illustrates the type of subscription conduct that will be captured by the new laws, and the significantly greater consequences businesses will face from 1 July 2027.

In Australian Competition and Consumer Commission v eHarmony, Inc [2026] FCA 1208 (the eHarmony decision), the Federal Court found that eHarmony engaged in misleading or deceptive conduct in relation to its subscription memberships. The decision offers a timely illustration of the types of practices that will soon face heightened scrutiny, and significantly greater penalties, under Australia's new UTP regime.

On 2 July 2026, Parliament passed the UTP Act, which commences on 1 July 2027. Among its key reforms, the Act introduces dedicated subscription contract provisions that require businesses to provide clearer disclosures, send renewal notices before subscriptions renew or free trials expire, and ensure consumers can cancel through a straightforward process. The Act also introduces a general prohibition on unfair trading practices and enhanced protections against drip pricing. The eHarmony decision demonstrates precisely the kind of subscription conduct these reforms target.

Automatic Renewals

The ACCC argued that eHarmony misled consumers into believing they were purchasing a premium membership for a fixed period of 6, 12 or 24 months. In reality, subscriptions automatically renewed for a further 12 months at a higher, non-discounted rate unless the consumer actively cancelled. The renewal terms were disclosed only in small font, late in the purchase process and buried in terms and conditions.

What made this particularly misleading was the interaction between the discounted pricing and the automatic renewal. A consumer who selected the 6-month discount option received the discounted rate for only 6 months before being automatically renewed at the full price, whereas a consumer who selected the 12-month option enjoyed the discount for the full 12 months. At no point was the consumer made aware that their choice of subscription length would limit the period during which the discounted price applied, or that any renewal would revert to the regular rate. As the Court noted, the consumer was given a "firmly established" impression that the subscription was for a fixed plan at a prominently advertised price, with the subscription period and discounted price displayed "far more prominently and given far greater emphasis" than any disclosure about renewal terms.

"Free" Online Dating Service

The Court also found that although eHarmony advertised a free dating service under its "basic" membership, the unpaid experience was "[f]ar from providing an experience that can properly be described as 'dating'". A basic member would be "tantalised with a list of other members with whom they had been 'matched', but unable to see unblurred profile photographs of those members or to exchange more than one 'personalised' text message with any other member". Basic membership essentially served as "a gateway to subscription as a Premium member".

Subscription Terms and Prices

The Court also found that eHarmony failed to display the minimum total amount a consumer would pay alongside its per-month pricing. The site conveyed that plans could be purchased on a monthly basis, even though additional mandatory fees applied. eHarmony also represented that users could withdraw their membership after signing up, when in fact cancellation was only possible after the subscription period had ended. The findings regarding cancellation rights are consistent with the policy direction of the UTP regime, which is designed to ensure that consumers can readily end recurring services without unnecessary obstacles.

The Penalty Gap

eHarmony's conduct was captured by existing ACL provisions, including the prohibition on misleading or deceptive conduct under section 18. However, section 18 does not attract civil pecuniary penalties. Under the new UTP regime, contraventions by a corporation will attract penalties of the greater of $100 million, three times the benefit obtained, or 30% of the body corporate's adjusted turnover during the breach period. This is a significant shift. Businesses engaging in subscription traps, manipulative renewal practices, and inadequate cancellation processes will face a fundamentally different enforcement landscape from 1 July 2027.

Authors: Anita Cade, Partner; Lachlan Wright, Senior Associate; Ted Talas, Senior Associate and Poppy Gammon, Lawyer.