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Various national competition authorities (“NCAs”) are continuing to consider sustainability arguments in competition cases. However, NCAs are increasingly diverging in their approach as to whether, and to what extent, they are willing to allow sustainability considerations in the competition law framework. This blogpost highlights a few recent developments in jurisdictions on both sides of the Atlantic.

Belgian approval of an initiative in the banana sector

On 30 March 2023, the Belgian Competition Authority (“BCA”) approved a sustainability initiative concerning living wages in the banana industry. This marks the first initiative based on sustainability grounds  approved by the Belgian NCA.

The IDH Sustainable Trade Initiative, a social enterprise working with various entities towards facilitating sustainable trade in global supply chains, and five Belgian supermarkets proposed a collaboration scheme aimed at closing the gap between actual wages and living wages in the banana sector. The collaboration will consist of meetings and discussions where the companies’ internal conduct will be assessed and further developed with the aim to better support living wages for workers in the participants’ banana supply chains.

The collaboration will involve the exchange of certain data and information which the BCA did not consider anticompetitive. The participants have committed to not set mandatory or recommended minimum prices and to not communicate any changes in costs relating to their supply chains. IDH will supervise the collaboration and any data shared will be verified by an independent third party.

Similar initiatives concerning the banana sector  have been proposed in Germany, the Netherlands and the UK. The German NCA has already approved the proposed initiative. Neither the Belgian nor the German NCA considered the initiatives in question to infringe competition law. There is, however, a fine line between such agreements falling in or outside the scope of competition law, and potentially amounting to an infringement. For example, clauses which lead to non-negligible price increases for end-consumers could raise questions and potentially be considered to have anticompetitive effect. It can therefore be expected that that NCAs will periodically monitor the implementation of such initiatives.…

Continue Reading Sustainability Agreements: Potential Divergence between Authorities

2022 and 2023 may be remembered as pivotal years for efforts against so-called “greenwashing.”  In this article, we look at some recent developments in the regulation of “green claims” in the UK, the US, and the EU that corporates should be aware of.  We provide a broad summary and comparison snapshot of the UK, US and EU regimes to help companies navigate these rules.  Now is a critical time for companies to get up to speed: authorities in all three jurisdictions are focusing more and more intently on this issue; company reputations will increasingly rise and fall with the strength of their green claims, and national regulators are set to get new powers (including the power to levy significant fines) to tackle companies found in breach.

I.  Summary of recent developments: What’s new in greenwashing?

In January 2022, the UK’s Competition & Markets Authority (“CMA”) launched a sector‑by‑sector review of misleading environmental claims.  The CMA started with the fashion sector, and called out a number of high‑profile, fast‑fashion companies for their practices.  Twelve months later, the CMA announced that it was expanding the investigation to greenwashing around “household essentials”, including food, drink, toiletries and cleaning products.  The CMA’s review is the first concerted application of the CMA’s new Green Claims Code, published in September 2021, which gives guidance for any business (wherever based) making environmental claims in the UK.

Meanwhile, in December 2022, the US Federal Trade Commission’s (“FTC”) launched a review of the “Guides for the Use of Environmental Claims” (“Green Guides”), which was last updated in 2012.  The initial comment period closed on April 24, 2023.  The FTC plans to update the Green Guides to reflect developments in consumers’ perception of environmental marketing claims.  As a part of its ongoing review, the FTC also announced a workshop to examine recyclable claims.  The workshop is scheduled for May 23, 2023 and the public can submit comments on the subject of recyclable claims through June 13, 2023.  For more detail on the review, please see our dedicated blog post, here.

Finally, the EU has proposed two Directives to modernize and harmonize the rules on green claims across the bloc (together, the “EU Green Claims Proposals”).  Currently, EU law does not specifically regulate environmental claims.  Instead, environmental claims are subject only to general consumer protection and advertising rules (set out in Directive 2005/29 on Unfair Business-to-Consumer Practices and Directive 2006/114 on Comparative Advertising).  Admittedly, the EU has published guidance on interpreting and applying the general rules in the context of green claims (see the guidance here, and see our previous blog post discussing the guidance here).  However, in practice, EU Member States approach interpretation and enforcement in a variety of different ways.  On March 3, 2022, the European Commission published a Proposal for a Directive Empowering Consumers for the Green Transition, also known as the “Greenwashing Directive.”  The Greenwashing Directive amends the EU’s existing consumer protection rules, and bans a number of general green claims, such as “climate neutral” or “eco-friendly.”  It also imposes some rules on the use of non-environmental sustainability claims or “social impact” claims, such as “locally produced” or “fair labour.”  One year later, on March 22, 2023, the European Commission presented a Proposal for a Directive on Green Claims (“Green Claims Directive”), which we discussed here.  The Green Claims Directive proposes a new and strict framework, applicable to all companies operating in the EU/EEA, to harmonize the rules on the substantiation of voluntary green claims. 

Below, we outline the key aspects of the different legislative frameworks.…

Continue Reading The Green Claims Global Drive: Developments in the UK, US and EU

Following the COVID-19 pandemic and the relatively slow approval of vaccines in the EU versus other key jurisdictions, as part of the EU’s General Pharmaceutical Legislation amendment proposal, published on 26 April 2023, the European Commission has proposed to introduce temporary emergency marketing authorizations (“TEMAs”) for use when there is a “public health emergency.”  The TEMA will be an “agile, fast and streamlined” process to allow products to be developed and made available as soon as possible in emergency situations.  However, it remains to be seen whether in practice the TEMA process will provide a faster procedure than existing routes for early and expedited approval of medicinal products, such as conditional marketing authorizations (“CMAs”) or Member State procedures for temporary approval.

Reason to Introduce the TEMA

The EU took a coordinated approach to approval and procurement of vaccines during the COVID-19 pandemic.  In the EU, COVID-19 vaccines were approved using the CMA procedure combined with a rolling expedited review.  According to the European Medicines Agency (“EMA”), CMAs were the “the most appropriate tool to grant access to COVID-19 vaccines to all EU citizens at the same time and to underpin mass vaccination campaigns.”  Vaccines approved with a CMA included Comirnaty, Nuvaxovid and Spikevax (amongst others).

However, the approval of COVID-19 vaccines in the EU was slower than in other jurisdictions.  For example, the UK MHRA granted Comirnaty a temporary authorization on December 2, 2020.  The US FDA gave the vaccine an Emergency Use Authorization on December 11, 2020.  Whereas, the Commission did not grant a CMA for the vaccine until December 21, 2020.…

Continue Reading EU Pharma Legislation Review Series: Temporary Emergency Marketing Authorizations

According to the European Commissioner for Justice, Consumers and Gender Equality, Věra Jourová, the EU and the US have finalized the EU-US Umbrella Agreement (for the press release, see here). This is a remarkable breakthrough after the first calls for such an agreement back in March 2009, when the European Parliament called for an…

Ending months of speculation, Danish Commissioner Margrethe Vestager (46) has been nominated for the Competition portfolio in the European Commission. The former Danish Minister of Economic Affairs and the Interior, and Deputy-Prime Minister, will take up one of the most powerful positions in the Commission, succeeding Joaquín Almunia, with the task of scrutinizing mergers and…

The outcome of the European Parliament (“EP”) elections, which ended on May 25, will lead to a more unstable political landscape.  This will require companies interacting with EU legislators to adapt their lobbying strategies.  They are likely to find a shift away from the current pro-business approach in the European Parliament and Commission.

The most…