CMA Strikes to Examine ‘Inexperienced’ Claims

CMA Moves to Investigate ‘Green’ Claims

On November 2nd, 2020, the UK’s Competition and Markets Authority (CMA) announced that it would investigate descriptions and labels used to promote products and services that are said to be “environmentally friendly” and whether they could mislead consumers.

The CMA fears that an increase in demand for sustainability could lead companies to make misleading, vague, or incorrect statements about the environmental impact of the goods or services.

The CMA has indicated that misleading behavior can include:

  • Exaggerating the positive environmental impact of a product or service
  • Use of complex or slang language
  • This means that packaging and logos make items environmentally friendly when they are not.

In addition, the CMA will examine whether the failure to provide all relevant information about the sustainability of a product or service could mislead consumers and violate consumer law. This can include a product that is not recyclable or is highly polluting.

Primarily, the CMA’s investigation will focus on the industries where consumers appear to be most concerned about misleading “green” claims. This includes textiles and fashion, travel and transportation, and fast-moving consumer goods (food and beverages, beauty products and cleaning products). If the CMA finds evidence that companies are misleading consumers, they will take enforcement action.

The CMA has published questionnaires for consumers, businesses and stakeholders that explain what consumers expect from environmentally friendly products, how often they encounter environmentally friendly claims, and how these affect their purchasing decisions. The call for information ends on December 14th. By the summer of 2021, the CMA wants to create guidelines for companies on how they can best be transparent about how they market goods and services with regard to information on environmental impacts.

In the meantime, the UK government has already issued guidelines on how to make an accurate environmental claim for a product, service or organization, and the UK Advertising Standards Authority (ASA) has set rules for environmental claims.

UK legislation governing misleading green claims includes the 2008 Consumer Protection Against Unfair Trade Legislation, which implements the EU’s Misleading and Comparative Advertising Directive. Legislation is enforced daily by the ASA under the GAP Code, but the CMA and trade standards act as a legal backlash and have the power to ultimately enforce it in court if necessary.

This is not just a UK concern and the CMA is working on a project with ICPEN (the International Network for Consumer Protection and Enforcement) with the Dutch Authority for Consumers and Markets. In November, the CMA maintains a “sample” of a random selection of ICPEN member websites to identify the types of misleading green claims around the world.

As we get closer and closer to the carbon neutral deadline of 2050, this evolution by the CMA is an important reminder for companies to ensure that products or services are marketed as clearly as possible to ensure that consumers are not misled.

If you need help with green claims management or other green news, please reach out to a member of our team.