On Monday 2 November, the UK Competition and Markets Authority (CMA) announced that it is examining how products and services claiming to be "eco-friendly" are being marketed, and whether consumers are being misled by such claims. Cooley competition specialist, Christine Graham, and litigation specialist, Prina Patel, join the Cooley Products Team to summarise what's been announced, and provide some guidance for those using "green claims".
The CMA's announcement
This new programme of work is in response to the growing number of products and services being marketed as environmentally friendly, as awareness of environmental issues increases. Indeed, according to a Co-op report, consumer spending on eco-friendly products and services has quadrupled in the last two decades. The CMA is concerned that this surge in demand for "green products and services" could provide an incentive for some businesses to make misleading, vague or false claims about the sustainability or environmental impact of the products and services that they sell. The CMA therefore plans to examine a wide range of sectors, with a particular focus on those industries where consumers are most concerned about greenwashing claims including the textiles and fashion sectors, travel and transport, as well as fast-moving consumer goods such as food and beverages, beauty products and cleaning products.
Whilst the CMA has not yet decided whether there is a breach of consumer law, it has indicated that the types of behaviour that it considers misleading in this context could include:
- exaggerating the positive environmental impact of a product or service;
- using complex or jargon-heavy language; and
- implying that items are eco-friendly through packaging and logos when this is not true.
The CMA is also exploring whether failing to provide all the relevant information about the sustainability of a product or service - for example, whether it is highly polluting or non-recyclable - could mislead consumers. The CMA has stated that if it finds evidence that businesses are misleading consumers, then it will take the appropriate enforcement action. Bear in mind that the CMA has form in following through on findings from its industry wide market investigations around unfair or misleading market practices. Some of these, such as investigations into fake and online reviews, and sales practices in the furniture industry, have gained both significant media attention and seen organisations make changes to their consumer facing practices as a result of CMA intervention.
The CMA is also taking a leading role in looking at green claims in a global context by working with the Dutch Authority for Consumers and Markets, as part of a project with ICPEN (the International Consumer Protection and Enforcement Network) to look at environmental claims in a global context. From 9 to 20 November, the CMA will "co-ordinate a 'sweep' of randomly selected websites with ICPEN members, with the aim of identifying the types of misleading green claims being made around the world".
Call for information
Seeking to better understand the impact of green marketing on consumers, the CMA has also launched a series of surveys for individuals, businesses and other stakeholders to give their views on what they expect from eco-friendly products, how often they come across green claims, and how these claims affect their purchasing decisions. The deadline for submission is 14 December 2020 with consumer protection law guidance expected to be published next Summer with the aim of supporting businesses to transition to a low carbon economy. This forms part of the CMA's wider commitment made in its 2020/21 Annual Plan to support the move towards a low carbon economy.
Interestingly, these developments come at a time when there is an increasing focus on 'greenwashing' by regulators and the role of competition authorities in achieving sustainability and environmental goals. For example, the European Commission is currently considering amendments to the EU consumer law framework to regulate environmental claims. These proposals form part of its Circular Economy Action Plan (read more about this here and here).
Current UK guidance
Given the growing focus on sustainability and the circular economy, for those seeking to use or using environmental claims in the UK, this announcement serves as a timely reminder to ensure that you are being as clear as possible to consumers and can substantiate what you are claiming. The UK Government has previously issued guidance which can be found here, together with the UK advertising code's rules on environmental claims which can be found here. You can also always speak to one of the Cooley Products Team.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.