Subscription traps under the spotlight: Federal Court finds eHarmony misled consumers on pricing, auto-renewal and cancellation

Background

On 25 August 2026, the Federal Court of Australia delivered judgment in Australian Competition and Consumer Commission v eHarmony, Inc [2026] FCA 1208. The proceedings were brought by the ACCC against eHarmony Inc, a US-based company that provides online dating services to consumers in Australia through its website and mobile apps.

eHarmony offered two levels of membership: a free "Basic" membership with limited features, and paid "Premium" memberships available in 6, 12 or 24-month subscription periods. Premium memberships were subject to automatic renewal for a default period of 12 months at the regular undiscounted price, unless the consumer took steps to disable renewal at least 24 hours before the renewal date.

The ACCC alleged six categories of contravening conduct. The Court (Horan J) found in favour of the ACCC on most of the claims.

The Court's findings

Misleading subscription representations — automatic renewal

The Court determined that eHarmony's subscription practices created a misleading impression of fixed-term plans, failing to adequately disclose automatic renewal terms. Key reasons included:

• Dominant impression of finite duration: Subscription plans were marketed on a "subscription page" as "6-month plan," "12-month plan," or "24-month plan," leading consumers to believe they were purchasing a subscription for a fixed period only. Early versions of the Subscription Page did not mention automatic renewal.

• Inadequate disclosure: Information about automatic renewal was buried in small, light grey font on a page which appeared late in the purchase process. This failed to counteract the impression of a finite subscription period.

• "One-time" payment option reinforced the misimpression: The inclusion of a "one-time" payment option further suggested that consumers were committing to a single payment for the selected period, rather than an ongoing subscription.

• July 2024 changes did not cure the defect: Changes made in July 2024, including a small-font disclosure beneath subscription plans, were deemed insufficient to address the misleading impression.

• Unfavourable renewal terms heightened the significance: Renewals occurred at significantly higher prices (up to 400% of the original discounted price), for lengthy periods that could not be cancelled, and without prior reminders until late 2023.

• Consumer evidence: Multiple consumers testified that they were unaware of automatic renewal at the time of purchase and were surprised by unexpected charges.

Pricing misrepresentations

The Court also found that eHarmony's pricing practices contravened the ACL:

• Monthly price representations: Subscription plans were advertised at a certain price without disclosing an additional mandatory fee of $3.00 per month for instalment payments. Early disclosures on a payment page did not sufficiently correct this misrepresentation. However, changes made in July 2024, including clarifications about upfront payments and total plan pricing, were deemed adequate to address this issue.

• Single price omission: eHarmony failed to prominently specify the total minimum price for each subscription period, instead advertising per-month pricing. This was found to breach the ACL's single price requirement.

Free dating representations

The Court held that eHarmony's representations about "free dating" were misleading, as the free Basic membership severely restricted functionality (e.g., blurred photos, limited messaging), making it impossible to meaningfully "date" other members without upgrading to a paid Premium subscription.

Misleading cancellation and subscription options

The Court identified further misleading representations in relation to cancellation and subscription terms:

• One-month subscription claims: eHarmony represented that consumers could purchase one-month subscriptions, despite only offering 6, 12, or 24-month plans.

• Cancellation representations: Statements suggesting consumers could "withdraw after signing up" were misleading, as cancellation was only effective at the end of the subscription period, with no refunds available.

Implications for subscription businesses

This decision, together with the ACCC's recent actions against JustAnswer (which resulted in a $10 million penalty for misleading subscription pricing conduct) and other enforcement activity, underscores that the ACCC is closely scrutinising subscription business models.

Key compliance considerations include:

• Prominent disclosure of auto-renewal: Businesses must ensure that the fact of automatic renewal, the renewal period, and the renewal price are prominently disclosed at or before the point of purchase — not buried in fine print late in the purchase flow.

• Accurate pricing: Headline prices must not omit mandatory fees or charges. Any additional fees associated with particular payment methods must be disclosed alongside the advertised price.

• Single price obligations: Where a per-unit price is advertised (e.g. per month), the total minimum price must be prominently specified as a single figure (s 48 ACL).

• Cancellation rights: Representations about the ability to cancel or withdraw from a subscription must accurately reflect the consumer's actual contractual rights.

• "Subscription traps": Businesses should review the overall purchase journey to ensure that consumers are not led into commitments (particularly automatically renewing commitments) that are not clearly communicated and understood before payment is made.

And there's more to come: getting ready for the new Unfair Trading Practices regime

The eHarmony and JustAnswer decisions, along with a range of further enforcement actions by the ACCC that are currently on foot, are really just the tip of the iceberg, given that these cases have all been brought under the existing prohibitions in the Australian Consumer Law on misleading and deceptive conduct, false and misleading representations, unfair contract terms and unconscionable conduct. From 1 July 2027, the ACL will also include a new general prohibition on unfair trading practices, new rules on ‘drip pricing’, and robust protections specifically governing the disclosures required when offering to supply subscription services to consumers.

We have a new online risk management tool in the works which will help businesses to assess whether their conduct could potentially fall short of the requirements imposed by the new unfair trading practices regime - watch this space - but, in the meantime, it will be important for businesses to heed the warnings of the eHarmony and related cases and start taking the following steps to ensure they are in the best position possible to comply with the new laws when they come into effect from 1 July 2027:

• reviewing sales, marketing, and digital interface practices to ensure they do not manipulate or unreasonably pressure consumers, particularly online;

• auditing all pricing displays to ensure mandatory transaction-based charges are disclosed upfront and clearly; and

• assessing subscription processes (from sign-up to cancellation) to ensure compliance with new disclosure, notification, and exit requirements.