In more detail
The ASAS received a complaint about an advertisement for air-conditioners where the caption read "Save Earth and electricity with 5 ticks energy savings". There were further marketing claims that the air-conditioners were the "best tip" to "save the earth".
The ASAS found that the claims breached one of the general principles of the SCAP, which prohibits advertisements from being misleading, whether by inaccuracy, ambiguity, exaggeration, omission or otherwise; and from misrepresenting any matter likely to influence consumers' attitude to any product.
Further, the ASAS found that it was not acceptable to communicate that a product brings about energy savings in view of the energy that appliances consume in any case. Regardless of how efficient an electrical appliance is, it will still not be beneficial for the environment.
Key takeaways
The Competition and Consumer Commission of Singapore announced on 16 November 2023 that it would be developing a set of guidelines to provide suppliers with greater clarity on environmental claims that could amount to unfair practices under the Consumer Protection (Fair Trading) Act (CPFTA), after a study found that one in two products sold online overstated their environmental claims. You may refer to our November 2023 alert for more details.
In just one month, the ASAS has found a company in breach of the SCAP for greenwashing. This illustrates that regulators and industry watchdogs are closely scrutinizing this space.
The SCAP is an industry code which does not have force in Singapore. The ASAS, which published the SCAP, regulates the advertising industry. Sanctions meted out by the ASAS for breaches of the SCAP include the withholding of advertising space or time from advertisers, as well as adverse publicity arising from the ASAS publishing details of the outcome of its investigations. Moreover, the ASAS may refer matters involving recalcitrant advertisers that repeatedly ignore the SCAP to the Consumers Association of Singapore (CASE).
Nonetheless, it may well be that a breach of the SCAP may suggest engaging in unfair practices under the CPFTA. For breaches of the CPFTA, in addition to consumers being able to commence civil proceedings against the supplier for damages, CASE may also invite the errant supplier to enter into a voluntary compliance agreement, which would contain written undertakings that the supplier would not engage in the said unfair practices.
The negative publicity attached to breaches of applicable legislation and/or advertising codes would not be desirable from a brand image perspective. Companies should therefore ensure the accuracy and compliance of any sustainability-related advertising claims to avoid any negative publicity, regulatory penalties and/or sanctions.
* * * * *
© 2023 Baker & McKenzie.Wong & Leow. All rights reserved. Baker & McKenzie.Wong & Leow is incorporated with limited liability and is a member firm of Baker & McKenzie International, a global law firm with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a "principal" means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an "office" means an office of any such law firm. This may qualify as "Attorney Advertising" requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.
