United Kingdom: CMA and Green Claims – greater enforcement to come?

In brief

In recent years, through the introduction of the Green Claims Code, the UK's Competition and Markets Authority (CMA) has taken an interest in the green claims made by businesses. This interest has included the CMA reviewing and investigating descriptions and labels used to promote 'eco-friendly' products. The Green Claims Code applies wherever a green claim is made by a business for a consumer.

As part of this interest in the green claims made by businesses, to date the CMA has focussed on two main sectors – the fashion retail sector and the Fast Moving Consumer Goods (FMCG) sector. While the CMA has already investigated businesses in the fashion retail sector, the CMA has more recently launched a review of environmental claims made by businesses in this FMCG space.


In more detail

Enhanced Enforcement Powers

These latest developments arise in a context of expected enhancements this year to the CMA's enforcement powers in response to breaches of requirements by businesses. In particular, the CMA's enforcement powers are expected to be further expanded with the coming into force of the Digital Markets, Competition and Consumer Bill ("DMCC Bill"), which is expected in the summer or autumn of 2024. The DMCC Bill (available here) as presently drafted gives the CMA unilateral powers to fine businesses, without needing to go to court.

Such enforcement powers will enable the CMA to fine businesses significant amounts of up to GBP 300,000 or, if higher, 10% of their annual turnover for a breach of consumer laws. The DMCC Bill also gives the CMA powers to fine for failures to comply with a CMA direction, namely: (i) a fixed amount of 1% of annual global turnover; (ii) a calculated daily rate penalty 5% of daily global turnover during non-compliance; or (iii) a combination of the two. The DMCC Bill is making good progress through parliament and is currently at the committee stage in the House of Lords.

CMA Investigation Process

As part of any investigation the CMA will typically initially contact the relevant business and set out its concerns in further detail in writing thereafter. Following this engagement, the CMA will progress its investigation by using certain information gathering powers to identify and acquire further evidence. The CMA will then determine whether any consumer protection laws have been breached, which, if so, the CMA has the option to:

  • Secure undertakings from the investigated company that it will amend its practices
  • Take the company to court
  • Close the investigation without action.

In light of these developments and heightened CMA scrutiny in this area, we recommend that businesses operating within the FMCG sector take steps to review their green claims, so as to ensure that these align with the Green Claims Code.

Contact Information

Copyright © 2024 Baker & McKenzie. All rights reserved. Ownership: This documentation and content (Content) is a proprietary resource owned exclusively by Baker McKenzie (meaning Baker & McKenzie International and its member firms). The Content is protected under international copyright conventions. Use of this Content does not of itself create a contractual relationship, nor any attorney/client relationship, between Baker McKenzie and any person. Non-reliance and exclusion: All Content is for informational purposes only and may not reflect the most current legal and regulatory developments. All summaries of the laws, regulations and practice are subject to change. The Content is not offered as legal or professional advice for any specific matter. It is not intended to be a substitute for reference to (and compliance with) the detailed provisions of applicable laws, rules, regulations or forms. Legal advice should always be sought before taking any action or refraining from taking any action based on any Content. Baker McKenzie and the editors and the contributing authors do not guarantee the accuracy of the Content and expressly disclaim any and all liability to any person in respect of the consequences of anything done or permitted to be done or omitted to be done wholly or partly in reliance upon the whole or any part of the Content. The Content may contain links to external websites and external websites may link to the Content. Baker McKenzie is not responsible for the content or operation of any such external sites and disclaims all liability, howsoever occurring, in respect of the content or operation of any such external websites. Attorney Advertising: This Content may qualify as “Attorney Advertising” requiring notice in some jurisdictions. To the extent that this Content may qualify as Attorney Advertising, PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME. Reproduction: Reproduction of reasonable portions of the Content is permitted provided that (i) such reproductions are made available free of charge and for non-commercial purposes, (ii) such reproductions are properly attributed to Baker McKenzie, (iii) the portion of the Content being reproduced is not altered or made available in a manner that modifies the Content or presents the Content being reproduced in a false light and (iv) notice is made to the disclaimers included on the Content. The permission to re-copy does not allow for incorporation of any substantial portion of the Content in any work or publication, whether in hard copy, electronic or any other form or for commercial purposes.