ACL Compliance is Not a Nap: Takeaways From the Emma Sleep Penalty and Unfair Trading Reform

In this article, authors Tamara Hunter & Ruiteng Liu (Mallesons) dissect the Federal Court’s decision ordering Emma Sleep to pay AU$15 million in penalties for misleading pricing and sales practices under the Australian Consumer Law. The case centered on Emma Sleep’s use of inflated strikethrough prices, exaggerated percentage-off claims, and “limited time” countdown sales that often reset or continued beyond the advertised deadline. The court found that many products had rarely, if ever, been sold at the higher reference price, creating a misleading impression of substantial discounts.

The authors explain that the scale of the conduct significantly influenced the penalty. The misleading advertisements reached millions of consumers across websites, social media, email campaigns, and SMS marketing, generating more than AU$134 million in sales revenue. Internal company communications revealed that senior executives were aware of the legal risks associated with the pricing strategies, yet discussions reportedly focused on finding ways around compliance concerns rather than addressing them directly. The court also criticized the company for failing to seek legal advice and for only changing its practices after repeated warnings from competitors and regulators.

The article places the decision within the ACCC’s broader crackdown on misleading sales and pricing tactics, particularly around Black Friday and other major retail campaigns. Regulators have increasingly focused on countdown timers, “sitewide sale” claims, strikethrough pricing, and urgency-driven marketing tactics that may pressure consumers into rushed decisions. The ACCC has recently expanded investigations into multiple retail sectors, including bedding, homewares, sports, and apparel, signaling heightened enforcement scrutiny across consumer-facing industries.

Hunter and Liu also examine the Australian government’s proposed Unfair Trading Practices Bill, which would introduce a broad prohibition on manipulative conduct designed to distort consumer decision-making. The reforms specifically target “dark patterns” such as artificial scarcity claims, countdown timers, drip pricing, and other online sales tactics that create unreasonable pressure on consumers. The authors note that businesses will increasingly need to assess both existing ACL obligations and the forthcoming UTP regime when designing marketing, pricing, and promotional strategies…

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