What do the existing regulations say?

Useful guidance for companies wanting to make truthful and clear claims within this space are provided by:

• Competition and Markets Authority’s Green Claims Code 2021
• Advertising Standards Authority's (ASA) CAP Code
• Consumer Protection from Unfair Trading Regulations 2008 (soon to be the Digital Markets, Competition and Consumers Act 2023) and Business Protection from Misleading Marketing Regulations 2008
  
  

Competition and Markets Authority’s Green Claims Code 2021

Before making a claim pertaining to your ‘green’ practices or products, consider the following questions (which form the six principles of the UK’s Green Claims Code):

1. Are the claims truthful and accurate?
2. Are the claims clear and unambiguous? Consumers must understand claims being made.
3. Do the claims omit or hide important information? Consumers must be able to make informed choices.
4. Do they only make fair and meaningful comparisons?
5. Substantiate claims. Robust and credible evidence is needed in order to support claims.
6. Do they consider full life cycle of product (from creation to disposal)?
   
   

Consumer Protection from Unfair Trading Regulations 2008 (soon to be the Digital Markets, Competition and Consumers Act 2023) and Business Protection from Misleading Marketing Regulations 2008

CPRs make it unlawful for a business to engage in unfair commercial practices. These would include misleading or false statements about a product or service if this could influence the purchasing decision of a consumer.

BPRs similarly state that misleading advertising that might influence the purchasing decisions of businesses or injure a competitor is prohibited.

Digital Markets, Competition and Consumers Bill

The DMCC Bill, which is now in the final stages of the legislative process, covers an array of issues relating digital markets, consumer protection law and competition law.

Part of the Bill focuses on misleading practices that can lead to consumers making purchases they might not otherwise have made, and to effect changes in the enforcement of consumer protection law to address this issue.

At this stage, it is difficult for the CMA to enforce breaches of consumer protection law (for example, where companies make misleading statements about the sustainability of their products or services) as in order to do so, such a claim must first be brought before court.

The DMCC will provide regulators, including the CMA, with such greater enforcement powers. For example, the CMA will be able to enforce penalties against breaches of consumer protection law including requesting the removal of certain content and the imposing of fines (of up to 10% of annual global turnover or £300,000, whichever is higher), without having first to go before court.

The DMCC is expected to receive Royal Assent this year. Businesses should therefore start to conduct stringent reviews of their marketing practices to ensure that going forwards, comprehensive consideration is given to the current regulation in place.