Greenwashing and more – recent ASA developments

What happened?

The ASA has completed a review of its rules and guidance on environmental claims to ensure they are fit for purpose. The regulator cites the fallout from the most recent report by the Intergovernmen-tal Panel on Climate Change (IPCC), among other things, as factors necessitating this action.

The regulator has set out three steps it proposes to take in relation to its regulation of green claims in advertising. It will commission research into carbon neutral, net zero and hybrid claims and begin enquiries on specific issues, focussing initially on energy, heating and transport. Lastly, the Commit-tee of Advertising Practice (CAP) will publish new guidance to help advertisers ensure their ads do not mislead consumers. It will complement guidance recently issued by the Competition and Markets Authority (CMA), to which the ASA contributed.

This statement puts advertisers on notice that their green claims will be under greater regulatory scru-tiny.

Want to know more?

The ASA has previously recognised the important role played by the advertising industry in influenc-ing how people respond to the challenges facing the planet. The CAP and BCAP Codes prohibit so-cially irresponsible and misleading environmental advertising (see Rules 9 and 11, respectively). The ASA enforces the Codes and has pledged to leverage technology assisted monitoring as it goes further in identifying and taking action against advertisers engaging in greenwashing.

To avoid falling foul of advertising rules around environmental claims, businesses should pay close attention to the new CAP guidance for advertisers, once published. Issue-specific guidance is likely to follow. Advertisers should also consider the CMA's guidance on misleading environmental claims. The Department for Environment, Food & Rural Affairs has also published a list of useful resources for advertisers making environmental claims.

Separately, the ASA has recently ruled against a number of advertisers for failing to fairly administer prize promotions. To avoid the negative media coverage and reputational damage that can accom-pany an ASA ruling, influencers and brands can refer to a new ASA resource page before running their promotions. Resources include infographics, e-learning advice and videos.

Product liability and safety horizon scanning – key issues to look out for in 2022

2022 is set to be a significant year for the UK's product safety and product liability regimes. In both areas, the EU has set out its proposals for significant reforms, largely focused on modernising the legislation, including by tackling difficult issues like the regulation of AI products and challenges posed by today's supply models like online marketplaces.

As the UK starts its second year as a third country outside of the EU, it will not be directly affected by the EU's proposed reforms. However, it is faced with a decision as to whether to introduce similar reforms or alternatively go in a different direction. This would result in greater divergence between the obligations and standards imposed on companies selling products on the UK and EU markets, as well as the consequences for such companies if something goes wrong.

We consider below some of the key issues to look out for in 2022.

Product liability reforms

Earlier this month, the EU Commission concluded its public consultation on its proposal to reform the Product Liability Directive 85/374/EEC (the PLD), which was enacted in 1985. The technological advances which have taken place since then have vastly altered the landscape in terms of the types of products being offered to consumers and the risks which such products pose.

The Commission is aiming to publish draft legislation in the third quarter of 2022 and while the precise contents of the reform package are yet to be determined, it could include the following:

• Reforming the legislation to explicitly cover intangible products like software.
• Alleviating or reversing the burden of proof in cases involving complex technology. This is in response to concerns about the difficulties faced by consumers in proving that a product is defective and further proving that there is a causal link between the defect and the damage caused to the consumer in cases involving highly complex technological products.
• Creating an exemption for AI products to the 'development risk defence' designed to shield the makers of innovative and emerging product types from being liable for defective prod-ucts. The defence applies if sufficient scientific and technical knowledge was not in circula-tion at the time of the product being placed on the market to enable the defect to be identi-fied by the producer.

These reforms would be seismic, and it is not yet clear whether the UK government is planning to follow suit by reforming the Consumer Protection Act 1987, which implemented the PLD in the UK. It is possible that the UK government will wait for the details of the draft EU legislation later this year before marking out its intentions. We are monitoring developments carefully.

Product Safety

The UK government has been more proactive in the field of product safety. The Office for Product Safety and Standards (OPSS), the UK government's product safety body, published a call for evidence in March 2021, seeking the opinions of stakeholders on a variety of issues including whether the UK's current product safety framework provides adequate protection from unsafe products. Another focus is whether the existing framework is versatile enough to safeguard consumers against the risk posed by new products, new technologies, and today's supply models (including in particular online marketplaces).

The OPSS's response to the Call for Evidence, published in November 2021, makes it clear that radical change to the UK's product safety regime is likely in the coming years.

The UK government is yet to introduce any legislative proposals, however some of the reforms being considered include:

• The introduction of e-labelling for products – this would give manufacturers the obvious ad-vantage of being able to update product labels electronically, for example in response to new legislation.
• Amending the existing regulations to ensure online marketplaces which may not have a UK presence are caught by the product safety rules and play a part in ensuring that the products which are purchased by a consumer are safe, even if they have been manufactured and sold by a third party seller. The OPSS has identified this as a major area of risk and believes ac-tion needs to be taken to safeguard consumers given the exponential rise in this model of supply and the novel risks it poses.
• Broadening the existing regulations to effectively cover software and artificial intelligence based products.
  
  The proposed reforms follow the European Commission's proposals for a new General Product Safety Regulation, to revise the existing system set out by the General Product Safety Directive (GPSD), which is a central pillar of the product safety regime in the EU and the UK . The EU's reforms also anticipate additional regulation of online marketplaces in order to improve consumer protection.

UKCA marking

In August 2021, the UK government postponed the mandatory introduction of the UKCA marking to replace the EU's CE marking for the Great Britain (GB) market. The new deadline for qualifying product types to go through a UK conformity assessment and bear the UKCA marking before being placed on the GB market is 1 January 2023. This means that manufacturers who have yet to make this transition will need to use 2022 to make sure they are prepared for this deadline.

There are transitional rules in place to allow for the UKCA marking to be affixed to product packaging (i.e. using a temporary sticker) or appear on product documentation until 31 January 2024. From this date, subject to a few exceptions, the UKCA marking will need to be printed on the product itself.

Environment / Sustainability

Building on the COP 26 summit in Glasgow in late 2021, 2022 is likely to see a greater focus on environmental and sustainability issues and the emergence of more draft legislation to tackle the environmental cost of consumer products. The UK Government has set out that the promotion of energy saving products is central to its Net Zero Strategy.

The EU has also announced proposals aimed at encouraging consumers to use products for longer and make more sustainable choices. Measures put forward in the European Commission's Call for Evidence include potentially amending the Sale of Goods Act Directive to enshrine a right of repair at a fair price and elevating this right of repair above the right to a replacement where appropriate.