In Touch: businesses that leave evidence of greenwashing to be swept up by ACCC review and other developments

The latest in competition and consumer law 5 min read

Businesses that leave evidence of greenwashing to be swept up by ACCC review

On 20 September 2022, ACCC Deputy Chair Delia Rickard addressed the Sydney Morning Herald Sustainability Summit stating that the ACCC will be focusing on 'greenwashing' claims made by businesses.

The ACCC is concerned that some businesses are falsely promoting environmental or green credentials to capitalise on changing consumer preferences (intentionally or unintentionally). Common issues include vague and generic claims, lack of information to substantiate claims and misuse of trademarks to help 'sell' green credentials.

The ACCC also announced they are conducting two 'internet sweeps' for misleading 'green claims' and misleading 'online reviews'. This will inform their compliance and enforcement activities.

• For misleading 'green claims' the ACCC has identified several target industries including energy, vehicles, household products and appliances, food and drink packaging, cosmetics, clothing and footwear.
• For misleading 'online reviews', the ACCC will focus on common products such as household appliances, electronics, fashion, beauty products, food and restaurants, travel services, sport, home improvement, kitchenware, health products, as well as furniture and bedding.

A similar review conducted in 2020 by the International Consumer Protection Enforcement Network found that approximately 40% of environmental claims were potentially misleading and required further investigation. The review analysed close to 500 websites promoting products and services across various industries including food, clothing and cosmetics.

The ACCC will use the data collected in its internet sweep to update its guidance for businesses and information for consumers. The ACCC is considering whether clearer standards and regulations are necessary to increase consumer confidence in environmental claims and protect businesses making legitimate environmental claims.

ACCC designs and constructs cartel case against ARM Architecture

On 30 September 2022, the ACCC instituted civil proceedings in the Federal Court against ARM Architecture and its former managing director, Mr Allen, alleging they engaged in cartel conduct by attempting to rig bids for a tender at Charles Darwin University.

Charles Darwin University announced plans for a $250 million project that would be funded by the Commonwealth Government and the university.

ARM Architecture was awarded the contract for the first phase of the project. The ACCC has alleged that Mr Allen emailed eight other architectural firms requesting them not to submit a bid in response to the second tender.     

The ACCC is seeking declarations, pecuniary penalties, costs and orders for compliance training.

The case will be listed at a later date.

Spirit Super and Palisade Investment Partners Consortium haunted by ACCC SOI

On 26 August 2022, the ACCC announced the Spirit Super and Palisade Investment Partners Consortium had withdrawn its application for the proposed acquisition of the Port of Geelong after it decided not to proceed with the transaction.

Palisade proposed to manage Commonwealth Superannuation Corporation's interest as well as its own. Palisade also manages investments totalling a 100% interest in the Port of Portland on behalf of investors.   

The ACCC has previously released a Statement of Issues outlining its preliminary concerns that the proposed acquisition would substantially lessen competition in the supply of port services for long-term bulk cargo customers in Victoria by reducing competition between the Port of Portland and Port of Geelong.  

The ACCC noted that common fund management and ownership among competing firms is increasingly becoming a focus of regulators and that even minority interests that allow a degree of control or influence will continue to be reviewed closely.

Mercedes bends to ACCC allegations; agrees to pay $12.5m penalty

On 2 September 2022, in proceedings brought by the ACCC, the Federal Court ordered Mercedes-Benz to pay $12.5 million in penalties for failing to comply with its obligations in relation to the compulsory recall of Takata airbags. 

This is the first time a company has been fined for failing to comply with a mandatory recall notice.

The ACCC instituted proceedings on 4 August 2021, alleging that Mercedes-Benz had failed to implement a communication and engagement plan for contacting customers as required. It alleged that Mercedes-Benz described the recall as a 'precaution' and stated that Takata airbags had not caused any accidents, injuries or deaths in other manufactures vehicles, when that was not the case.

The ACCC had previously taken enforcement action against Mercedes-Benz in relation to its obligations associated with the compulsory recall of Takata airbags, accepting a court-enforceable undertaking from Mercedes-Benz for failing to initiate the recall of certain affected vehicles.  

ACCC pieces together case against Mosaic Brands

On 15 September 2022, Mosaic Brands paid penalties totalling $266,400 after the ACCC issued two infringement notices for two false, misleading representations made by Mosaic in relation to separate products.

Firstly, the ACCC alleged that Mosaic Brands falsely represented that its KN95 Mask product was approved by the Food and Drug Administration (USA) and Conformitè Europëenne (EU), by describing the mask as 'FDA AND CE APPROVED', when in fact it was not.

Secondly, the ACCC alleged that Mosaic Brands falsely represented that a hot water bottle had been 'ACCC Approved', when this was not true. The ACCC does not endorse or approve any products.

Mosaic Brands had previously admitted to making false or misleading claims about its hand sanitiser and face mask products during the COVID-19 pandemic, for which it paid penalties totalling $630,000 and entered into a court-enforceable undertaking which included implementing a consumer law compliance program. 

Up in the air: ACCC releases preliminary views on Qantas' acquisition of Alliance

On 18 August 2022, the ACCC released a statement of issues in relation to Qantas' proposed acquisition of Alliance Aviation Services.

The ACCC outlined its preliminary view that the proposed acquisition may, or is likely to, substantially lessen competition in the markets for the supply of:

• air transport services to corporate customers to and from regional and remote resource locations in Queensland and/or Western Australia;
• regular public transport services on the Brisbane-Moranbah route; and
• regular public transport services in various regional areas or routes;

by:

• removing Alliance as a close competitor to Qantas; and/or
• raising barriers to entry by removing Alliance as a supplier of wet-leased aircraft.

The ACCC invited submissions from interested parties in response to the statement of issues by 1 September 2022.

The ACCC’s final decision is scheduled for 17 November 2022.