Briefing Note: CMA secures landmark changes from fast fashion brands

CMA secures landmark changes from fast fashion brands

ASOS, Boohoo and George at Asda have signed formal agreements with the Competition and Markets Authority (“CMA”) to use only accurate and clear green claims.

CMA has additionally issued an open letter to the sector advising all fashion retailers to review their claims in light of the commitments.

Rules around advertising green claims

The CMA has produced guidance to help businesses understand and comply with their existing obligations under consumer protection law when making environmental claims.

This guidance is set out within its Green Claims Code, which falls into six principles:

1. claims must be truthful and accurate
2. claims must be clear and unambiguous
3. claims must not omit or hide important relevant information
4. comparisons must be fair and meaningful
5. claims must consider the full life cycle of the product or service
6. claims must be substantiated

The ASA has the following collateral around environmental claims:

● ASA Environmental claims: General “Green” claims
● ASA research on green disposal claims in ads
● Advertising Guidance - misleading environmental claims and social responsibility

Potential future fines

The UK Parliament is currently considering the Digital Markets, Competition and Consumers Bill. Should it become law, it is envisaged that significant monetary penalties may be imposed, either by the court or by the CMA, where parties are found to be in breach of certain consumer protection legislation. Such penalties may be up to 10% of a business’ worldwide turnover. Future action by enforcers, including in respect of misleading green claims, could therefore result in the imposition of a penalty.

Background to CMA investigation

In July 2022 the CMA launched an investigation into ASOS, Boohoo and George at Asda.

The watchdog was concerned about the way the firms’ products were being marketed to customers as eco-friendly – see CMA press release.

Further information

● ASOS, Boohoo and Asda: greenwashing investigation page
● Misleading environmental claims collection page
● PODCAST CMA’s Cecilia Parker Aranha talks fighting greenwashing with its Green Claims Code
● CMA - ASOS, Boohoo and Asda: greenwashing investigation

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Information obtained through our IMTB membership.