Spring is coming – what can businesses in the UK expect from the CMA on greenwashing amidst new consumer protection provisions coming into effect

The consumer protection provisions in the Digital Markets Competition and Consumers Act 2024 (DMCCA) will come into force on 6 April (with the exception of specific provisions relating to subscription contracts).  

From this date, the Competition and Markets Authority (CMA) will have strengthened powers to determine whether consumer protection laws have been breached, and take direct action to address those breaches (including via fines of up to 10% of global turnover), without needing to take businesses to court.  

Given the CMA’s previous stance on tackling greenwashing (among other consumer issues), now is a good time for businesses to make sure that they remain in the “green” come April.

Approaching compliance – priorities for businesses

It was only 7 months ago when the CMA published further greenwashing compliance guidance for the fashion retail sector, along with warning letters to 17 unnamed fashion brands (see our previous blog post) and yet you would be forgiven for thinking that that was a lifetime ago. 

The CMA in recent weeks has found itself in the crosshairs of the government’s growth agenda, which has resulted in a range of announcements confirming commitment to predictable, faster processes that are proportionate. 

Last week, the CMA set out in a written update, and in a techUK speech provided by CEO Sarah Cardell, what businesses can expect over coming months as the new consumer regime comes into force. This included a birds-eye view on enforcement priorities and a strong emphasis on facilitating compliance as opposed to aggressively pursuing enforcement action where possible (at least in the short term), acknowledging that consumer protection compliance plays an important role in building UK consumers’ confidence to engage meaningfully in the economy. Even when enforcement action is taken, the CMA has confirmed that it will take account of the proactive compliance measures taken by businesses in any penalty calculations.

Enforcement priorities 

The CMA has announced that it will initially focus on enforcing against the most egregious harms, including aggressive sales practices that prey on vulnerability, providing information to consumers that is objectively false, contract terms that are very obviously imbalanced and unfair, behaviour where the CMA has already put down a clear marker through its previous enforcement work, and banned practices (i.e. practices that are always unfair). 

The CMA recently published its procedural guidance on direct enforcement, which includes examples of unsubstantiated harms, and how these are likely to be approached by the CMA for the purposes of penalty calculations, suggesting that this remains an enforcement priority. 

We are awaiting the publication of the Consumer Detriment Survey, which will provide more colour on the sectors where the CMA is likely to prioritise enforcement, but we would anticipate continued scrutiny of green claims, and a requirement that businesses interrogate and substantiate claims made to consumers (see our previous blog post on commitments following the CMA’s investigation into ASOS, Boohoo and Asda (George)).  

Remember, remember, the 6^th of April

Greater clarity is expected ahead of 6 April as the CMA has promised to publish an approach document that set out its enforcement priorities for the next 12 months in more detail. The CMA will also publish revised unfair commercial practices guidance.

Ostensibly, the CMA is playing “good cop” with its new enhanced enforcement powers and indicating the regime will kick-start in a more discursive, collaborative vein than observers may have anticipated 7 months ago, taking account of the challenges businesses face to comply with certain aspects the DMCC and the broader “pro-growth” context that is so important to government.  

The question now is whether this more collaborative approach will be read across to the CMA’s tackling of green claims.  Watch this space as we provide you a further update on what the approach document and updated guidance means for businesses, once they are published in less than a month’s time. 

Further reading 

• UK CMA publishes Green Claims Code to combat ‘greenwashing’
• Evidence and context – the key to green advertising claims in the UK in 2024
• UK: CMA sets out green compliance standard for environmental claims in the fashion sector
• No excuse for non-compliance! New CMA greenwashing guidance for the fashion industry in the UK 
• In vogue? Green claims in fashion regulation, a growing trend