Legal Trends and Regulatory Risks Australian companies should prepare for in 2026

As we settle into 2026, Australian companies face one of the most dynamic legal environments in recent history. From regulatory reforms to rapid technological change, companies of all sizes must adapt to stay compliant, competitive, and resilient. In this post, we unpack the top legal trends and risks shaping the corporate world and offer practical insights for companies.

Mandatory merger control regime in effect

As discussed in our previous article, Australia is transitioning from a voluntary merger review process toward a mandatory pre‑merger notification regime.  This shift means businesses now face stricter scrutiny before completing transactions. Understanding the new thresholds and timelines is essential to achieving deal certainty.

What this means for businesses:

• Plan deal timelines with regulatory review periods in mind.
• Engage competition lawyers early to assess notification requirements.
• Build compliance checklists for cross‑border transactions.

ESG is now a core governance responsibility

Environmental, Social and Governance (ESG) considerations have moved from voluntary practice to legal and financial expectation. Investors, consumers, regulators and lenders are increasingly demanding transparency and accountability.

Key areas of focus include:

• Supply chain emissions reporting and net‑zero planning.
• Corporate governance processes addressing social risk.
• Non‑financial disclosures and sustainability metrics.

The takeaway: Embed ESG due diligence in every major commercial decision.

AI, automation & legal compliance

Artificial intelligence (AI) continues to reshape legal and business operations, from contract review to compliance monitoring. While efficiency gains are undeniable, they introduce risks relating to data privacy, bias, cybersecurity and contractual accuracy.

Action points:

• Assess AI tools for privacy, governance and ethical risk.
• Implement policies governing AI use in legal and operational settings.
• Train teams on responsible AI deployment.

Corporate governance: Evolving director duties in risk management

Directors and officers remain under heightened scrutiny in areas such as:

• cybersecurity preparedness;
• anti‑money‑laundering and Know Your Customer obligations for reporting entities; and
• financial reporting and broader risk oversight.

Boards must stay ahead of emerging liabilities by reviewing governance frameworks, internal controls, and crisis response plans.

Heightened regulatory scrutiny of privacy practices

Australia’s privacy regulator, the Office of the Australian Information Commissioner (OAIC), is moving beyond a strictly breach-driven approach. In December 2025, the OAIC announced that it would be conducting its first privacy compliance sweep of Australian businesses this month, signalling that compliance on paper is no longer enough – internal practices must align with published privacy statements.

The bottom line

With 2026 underway, companies face increasingly proactive regulatory enforcement and heightened class action exposure, particularly in the areas of ESG and data and privacy.

Strategies for managing these risks and ensure compliance include:

• Audit contracts for regulatory, ESG, and data/privacy risks.
• Update corporate policies to reflect legal reforms, including ESG, AI, privacy, and cyber.
• Leverage legal tech for real-time compliance monitoring and reporting.
• Train directors and officers on fiduciary duties, statutory obligations, cybersecurity, and ESG.
• Embed ESG due diligence in major transactions, supply chains, and strategic initiatives.
• Assess AI tools for privacy, bias, and ethical risk before deployment.
• Align data practices with policies and regulatory requirements.

• Maintain incident response and governance frameworks for cyber, anti‑money‑laundering, and financial risks.

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Groom Kennedy assists businesses in navigating regulatory, ESG, privacy and technology-related changes by providing clear, practical legal guidance tailored to your organisation’s needs. Contact us if you’d like support applying any of these developments to your business.

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This article includes general information only and is not specific to your situation. If you require assistance in relation to anything contained within this article, please contact us.

Key Questions Answered

What do the 2026 merger control reforms mean for Australian businesses?

The move to mandatory pre‑merger notification means transactions may face additional regulatory steps, making early legal review more important.

How are director duties evolving in 2026?

Directors face greater scrutiny over risk management, particularly in cybersecurity, AML/KYC compliance and financial reporting.

Why is the OAIC increasing privacy compliance enforcement?

The OAIC’s first privacy compliance sweep signals a proactive regulatory stance, emphasising that internal data practices must align with published privacy statements.

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