Competition and Markets Authority investigates fashion industry

Competition and Markets Authority investigates fashion industry

in seven months[1] of the UK regulator, the Competition and Markets Authority (“CMA“), announcing its review of green claims in the fashion retail sector, has opened an investigation into such environmental claims made by various fashion companies, including ASOS and George at Asda. This comes less than a year after the CMA notified all companies to ensure their green claims were in compliance with the law.

The investigation will look at each company’s environmental claims in light of the CMA’s Green Claims Code (for more information see our previous post here) and UK consumer protection law. Notably, the CMA has not yet reached a conclusion as to whether the retailers are breaking the law.

In its review, the CMA says it is looking at companies’ fashion products and, in particular, clothing lines that are marketed with environmental language, such as “responsible editing“, “ready for the future” Y “George forever“.

In deciding whether to take further action (such as criminal prosecution or demanding commitments), the CMA will consider several factors, including:

  • if the language used to advertise products is misleading regarding their green credentials

  • the criteria companies use to assign products to their sustainable lines and whether they are being met

  • the level of product information provided to customers

  • misleading claims and/or credentialing schemes

The CMA is now collecting evidence using its legal powers and has reportedly written to at least three companies raising its concerns. The acting CEO of CMA warned that if these companies have used misleading green claims, “[the CMA] will not hesitate to take coercive measures, through the courts if necessary“.

This is an important message for all companies, and not just those in the fashion retail space. It highlights that the CMA is actively pursuing greenwashing, and the CMA further highlights that the “A broader review of the fashion sector and potentially misleading environmental claims in other sectors will continue…

american action. It is not just in the UK where greenwashing is high on the agenda. In the US, several high-profile retailers are currently facing a proposed class action lawsuit in relation to allegedly misleading environmental claims, similarly in relation to their eco-friendly clothing lines.

Companies must address these latest efforts to address greenwashing as a warning and strive to ensure the credibility of their sustainability claims to ensure continued consumer confidence.

Danielle Jones also contributed to this article.


FOOTNOTES

[1] [ 10 Jan 2022, “Compliance Review commences” (Misleading environmental claims – GOV.UK (www.gov.uk)) ]

© Copyright 2022 Squire Patton Boggs (US) LLPNational Law Review, Volume XII, Number 227

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