20.06.2024

EU-wide measures to combat environmental misinformation in B2C relations

The European Union has adopted a set of measures against misleading environmental claims and premature obsolescence that could be used in business-to-consumer (B2C) relationships. These measures were included in Directive 2024/825 of the European Parliament and of the Council amending Directives 2005/29/EC[1] and 2011/83/EU[2] as regards enhancing the role of consumers in the green transition by better protection against unfair practices and better information (hereinafter "Directive 825"). Directive 825 was published on March 6, 2024, and Member States are required to adopt and publish by March 27, 2026 the national legislation transposing Directive 825.

Directive 825 introduces the concept of 'greenwashing', which is the use of misleading environmental claims to mislead consumers when making purchasing decisions. This Directive does not stop there, however, but has a wider scope, and other objectives of this piece of legislation are listed below, without being exhaustive:

- it aims to combat the use of misleading information about the social characteristics of products or traders' businesses; these are claims about the quality and fairness of working conditions, equal treatment, ethical codes such as animal protection;

- prohibit unfair practices concerning the premature obsolescence of goods. According to recital 16 of Directive 825, this premature obsolescence is understood as a commercial policy which involves deliberately planning or designing a product with a limited lifetime so that it becomes obsolete or inoperative after a certain period or intensity of use;

- establish a system of sustainable labels based on transparency and credibility.

This does not mean that companies will no longer be able to use environmental or social claims in their marketing communications, but they will have to comply with the requirements set out in Law 363/2007 on combating unfair commercial practices by traders in relation to consumers.

First of all, Directive 825 stipulates that the main characteristics of the product will include, among others, its social or environmental characteristics, circularity aspects such as durability, reparability or recyclability. The consequence will be that information on these will be considered to have an influence on the consumer's decision to buy the product, so professionals will have to pay particular attention to the wording of claims and marketing communications used by professionals. The burden of proving the accuracy of the claims rests with the trader and, to the extent that the trader fails to provide the evidence or the evidence is insufficient, then the claims used will be considered inaccurate and the use of inaccurate claims is one of the conditions for being in the presence of an unfair commercial practice.

Secondly, unfair commercial practices can be sanctioned on several levels. The National Authority for Consumer Protection can impose a fine and the additional sanction of suspending the provision of the service or the sale of the product in question. Then, in civil proceedings, the consumer affected may request that the situation be remedied by (i) replacement, price reduction or termination of the contract and reimbursement of the value of the product or service, as appropriate, or (ii) payment of damages by the offending trader.

Thirdly, Directive 825 will consider certain commercial practices as unfair in all circumstances, so that a case-by-case analysis will no longer be necessary, the mere finding that the practice is one of the black-listed practices will be sufficient to conclude that an unfair practice exists. Generic environmental claims that a product has a positive or no environmental impact or that it is less harmful to the environment than other products will be prohibited as long as a recognized excellent environmental performance cannot be demonstrated. This environmental performance will mean environmental performance in accordance with the EU Ecolabel Regulation 66/2010 or national or regional eco-label schemes.

Another practice that will always be considered incorrect is the use of an environmental claim in relation to the whole product or the whole of the trader's business, even though this claim relates in fact to only a specific aspect of the product. For example, if only part of the product is made of recyclable materials, the claim will not be used in relation to the whole product.

Claims that a product has a neutral, low or positive impact on the environment based solely on offsetting greenhouse gas emissions will be considered incorrect in all cases. The rationale for banning such claims is set out in the preamble to Directive 825 and it was considered that such claims mislead consumers as they give the false impression that the product in question has no environmental impact and the real life-cycle impact of the product is not taken into account.

Fourthly, Directive 825 imposes restrictive conditions on the application of sustainability labels by traders. Such labels within the meaning of Directive 825 means any voluntary trust mark, quality mark or equivalent, public or private, which seeks to distinguish and promote a product, process or undertaking by reference to its environmental or social characteristics or both, and which excludes any mandatory label required under Union or national law.

The use of sustainability labels will only be permitted where it is based on a certification scheme or imposed by public authorities. If these conditions are not met, the application of sustainability labels will be a commercial practice considered unfair in all circumstances.

In conclusion, the recommendation is that professionals should in the near future review their commercial communications on their products to ensure that they comply with Directive 825.

An article by Daniel-Alexandru Aragea, Partner - daragea@stoica-asociatii.ro - STOICA & ASSOCIATES

[1] Transposed into national law by Law No 363/2007 on combating unfair commercial practices by traders in relation to consumers

[2] Transposed into national law by Government Emergency Ordinance No. 34/2014 on consumer rights in contracts concluded with professionals, as well as amending and supplementing certain normative acts