The Australian Competition and Consumer Commission (ACCC) has spent the last two years quietly building its understanding of how AI is being used in Australian commerce: and it doesn’t like everything it sees.

For Australian small businesses using AI in their marketing, pricing, customer service, or hiring, the ACCC’s evolving position matters. Here’s what the regulator is focused on and what it means for you.

What the ACCC Has Been Investigating

The ACCC’s interest in AI spans several areas, most of them relevant to how businesses interact with consumers:

1. AI-Generated Reviews and Fake Testimonials

The ACCC has been explicit that using AI to generate fake or misleading reviews: or to manipulate review platforms: constitutes misleading conduct under the Australian Consumer Law (ACL). This isn’t new law; it’s existing law applied to a new tool.

What is new is the scale. AI makes it trivial to generate hundreds of plausible-sounding reviews at low cost. The ACCC has flagged this as a priority enforcement area, particularly following its Digital Platform Services Inquiry.

2. Dynamic and Algorithmic Pricing

AI-driven dynamic pricing: where prices are adjusted in real time based on demand, competitor pricing, or customer characteristics: is increasingly accessible to small businesses through tools like Shopify’s pricing apps or third-party repricing tools.

The ACCC is concerned about two specific practices:

Price discrimination based on personal data: Charging different customers different prices based on their browsing history, location, device type, or inferred willingness to pay: without disclosure: raises ACL concerns around misleading conduct and potentially unconscionable conduct.
Drip pricing: AI-optimised checkout flows that progressively reveal mandatory fees after the consumer has committed to a purchase. The ACCC has taken enforcement action on drip pricing and is watching for AI-enhanced versions.

3. Misleading AI Chatbots

The ACCC has signalled concern about businesses deploying AI chatbots that make representations to consumers: about products, prices, availability, or warranties: that are false or misleading. Under the ACL, it doesn’t matter whether the misleading statement was made by a human or an AI system. The business is responsible.

This has practical implications for small businesses using AI chat tools with custom training. If your chatbot confidently tells a customer they’re entitled to a refund when they’re not, or quotes a price that doesn’t reflect your actual pricing, that’s your problem: not the chatbot vendor’s.

4. Algorithmic Discrimination

The ACCC has raised concerns about AI systems that systematically disadvantage certain consumer groups: by showing higher prices to people in certain postcodes, denying credit to people with particular demographic characteristics, or serving different marketing to different groups in ways that may breach discrimination law.

For most small businesses, this is more of a watch-and-wait issue: the immediate enforcement risk is low. But it’s worth understanding as AI becomes more embedded in pricing and marketing decisions.

What the ACCC Has Actually Done

The ACCC’s AI-specific enforcement actions to date have focused primarily on large platforms rather than small businesses. Actions against Google, Meta, and various comparison website operators have established principles around AI transparency and misleading digital conduct.

However, the ACCC has been clear that small businesses are not exempt from the ACL’s requirements simply because they’re small. The same rules apply: the enforcement priority may differ, but the legal obligation does not.

Australia’s Broader AI Regulatory Landscape

The ACCC is one part of a broader Australian regulatory response to AI. Other relevant bodies:

The Office of the Australian Information Commissioner (OAIC): Focused on AI and privacy: particularly how businesses use personal data to train or operate AI systems.
ASIC: Focused on AI in financial services: automated advice, algorithmic credit decisions, and AI-generated financial content.
AHPRA: Focused on AI in healthcare: clinical AI tools, AI-generated health content, and digital health platforms.
The Department of Industry (AI Safety): Developing Australia’s national AI framework, including voluntary guardrails for businesses developing or deploying AI.

Practical Steps for Small Businesses

You don’t need a legal team to stay on the right side of the ACCC on AI. A few practical steps cover most of the risk:

Don’t use AI to generate fake reviews. This is the highest-risk, clearest-cut ACL violation. Never generate or post fake reviews, regardless of the tool used.
Review what your AI chatbot says. If you’re using a chatbot with custom training, periodically test it with common customer questions and verify the answers are accurate. You’re responsible for what it says.
Be transparent about AI-generated content. While there’s no specific Australian law requiring disclosure of AI-generated marketing content, the trend is toward greater transparency: and consumers increasingly expect it.
Don’t use personal data for pricing without disclosure. If you’re using data about a specific customer to personalise their pricing (rather than general demand-based pricing), get legal advice on your disclosure obligations.
Keep records. If you use AI for decisions that affect customers: credit decisions, marketing targeting, service allocation: keep records of how those decisions were made. This is good practice and increasingly will be required.

🦅 The bottom line: The ACCC’s position on AI is essentially an extension of existing consumer law into a new context. The ACL rules you already follow: don’t mislead, don’t use unconscionable practices, honour consumer guarantees: apply equally when the tool doing the communicating is an AI. That’s not scary. It’s just the same obligation you already have.

This article is general information only. If you have specific concerns about AI and your legal obligations, consult a lawyer with experience in Australian consumer law.

📬 Get the SmallBizAI.au Weekly

Practical AI news for Australian small businesses — every week, free.

📬 The SmallBizAI Brief

One practical AI tip for Australian small business. Every Tuesday. Free.

Join business owners getting smarter about AI every week.

Subscribe free →

Sources

📊 Compare AI tools side by side | 💼 Free resources & AI prompt packs

📖 More deep dives: News Deep Dives

More on AI & law: Legal & Privacy Hub →

📊 Compare AI tools side by side | 💼 Free resources & AI prompt packs

The ACCC Is Watching How You Use AI — What Australian Small Businesses Need to Know

What the ACCC Has Been Investigating