What's the issue?

Following a consultation, the Competition and Markets Authority (CMA) determined that consumers find a lot of claims that products and services are environmentally friendly confusing at best, and untrustworthy at worst.  It seems all too easy for businesses to claim their products are 'green', 'eco-friendly' or 'recyclable' but there is little clarity as to what this means and on what basis claims are made.

What's the development?

The CMA has now published draft guidance for consultation. It sets out a series of high-level principles to help businesses comply with consumer protection law together with guidance on how to adhere to them.

The CMA is proposing that businesses follow six core principles when making green claims in advertising.  The claims should:

• be truthful and accurate
• be clear and unambiguous
• not omit or hide important information
• only make fair and meaningful comparisons
• consider the full lifecycle of the product
• be substantiated.

What does this mean for you?

The draft guidance is intended to apply to all businesses making environmental claims aimed at consumers.  This includes claims by manufacturers, wholesalers or retailers, whether about goods or services, particular components or aspects of them, or the business as whole.

While the guidance is focused on protecting consumers, it will also apply to manufacturers and wholesalers which don't have direct contact with consumers but whose claims have a direct impact on them.

It will apply not only to UK-based businesses but also to businesses based outside the UK in relation to their UK activities.

The guidance will not be legally binding but is intended to provide clarity to help prevent advertisers breaching consumer protection law.  Advertisers may, therefore, want to feed in to the consultation which closes on 16 July.  A final version of the guidance is expected by the end of September 2021.

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And in other news...

Ofcom consultation on regulation of advertising on VSPs

Ofcom has published for consultation its approach on regulating advertising on video sharing platforms (VSPs).  The statutory framework, introduced in November 2020, distinguishes between advertising that is marketed, sold or arranged by the VSP provider, and advertising that is embedded within shared content uploaded onto the VSP.  In other words, advertising within the control of the VSP, and advertising outside the VSP's control.

VSPs are responsible for ensuring that advertising within their control meets certain standards.  Ofcom proposes appointing the ASA as the day-to-day administrator with Ofcom as the statutory back-stop regulator.  It proposes adding a VSP annex to the CAP Code.

The consultation closes on 28 July 2021.

ASA call for evidence on racial and ethnic stereotyping in advertising

The ASA has launched a call for evidence on racial and ethnic stereotyping in advertising.  Once it has assessed the evidence, it will report on whether it is effectively tackling ethnic stereotyping in ads and whether and what changes are needed.  Evidence must be submitted by 30 June 2021.

CAP and BCAP consultation on new rules on harm and protected characteristics

CAP and BCAP are consulting on the introduction of new rules on harm and protected characteristics.  Proposals are to introduce new rules to ensure marketing communications and adverts do not contain anything likely to cause harm.

Marketers and broadcasters will have to pay particular regard to the likelihood of causing harm to vulnerable people and to those sharing protected characteristics as defined in the Equality Act 2010.  These include age, disability, gender reassignment, marriage and civil partnership status, pregnancy and maternity, race, religion or belief, sex and sexual orientation.

The consultation closes on 24 August 2021.