The Netherlands Authority for Consumers and Market (ACM) strictly monitors compliance with consumer law (see also this and this blog). Also recently, companies have had to adjust their behaviour under pressure from ACM so as not to mislead consumers. This blog lists the latest developments. It discusses the European Commission’s updated guidance on unfair commercial practices. It also addresses ACM’s recent commitment decisions in the field of sustainability claims. At the end of this blog, key tips are provided for businesses (for previous tips, see this, this, this and this blog).
ACM has completed several interesting procedures. It has been given a commitment, for instance, by webshop platform Shopify. Shopify has promised to ban webshops that violate consumer rules. Shopify will also ensure that the obligation to state webshop contact details is ‘built into’ the model websites used by merchants. ACM has also been given a commitment by Wonderbox. Wonderbox, a publisher of various gift cards, will in the future inform consumers more clearly about the businesses where they can redeem their cards.
ACM has furthermore imposed a €100,000 fine on webshop TrendX for misleading consumers. TrendX posted fake positive reviews and removed negative reviews. The webshop also failed to provide clarity about the delivery time of products. The website is now off the air.
ACM furthermore imposed a fine on Privilege B.V. Privilege offers consumers a paid subscription to the website www.mijnprivileges.nl, which gives consumers access to online auctions of various products and services. Privilege thereby limits in its terms and conditions the possibility for consumers to cancel their membership prematurely. ACM imposed an order subject to penalty on Privilege on that ground. For every week that this restriction is not lifted, Privilege will forfeit a penalty of €15,000, up to a maximum amount of €240,000.
In addition, an investigation by ACM has ensured that eight major holiday home providers will from now on list prices that include all mandatory additional costs. ACM has announced that prices in the travel industry will be monitored in the coming period (see also this and this blog). An order subject to a penalty was imposed on online shop Kjekk for failing to cooperate with an investigation by ACM. Many consumers had reported that the webshop was not delivering orders in time and that consumers were not getting their money back in time.
ACM recently also completed an investigation into public perception of door-to-door selling. ACM had launched that investigation because it regularly received complaints from consumers. Out of the people who have experience with door-to-door selling, 45% view this form of selling as (very) negative. Consumers find door-to-door selling unhelpful, unpleasant and unreliable. Slightly more than half of consumers even stated that they think it would be a good idea to ban door-to-door selling. ACM will also crack down on violations of the rules for paid telephone forwarding services. Companies that fail to comply with the rules will have to surrender their numbers.
ACM has also appealed to online shoppers first to check reviews if they are dealing with unfamiliar webshops. It has furthermore updated the rules to combat online deception. Its Guidelines for the Protection of Online Consumers are a tool for online businesses, marketers and people working in e-commerce. The Guidelines define the line between seduction and deception.
ACM has furthermore announced that fake discounts will be more closely monitored as from 1 January 2023. Rules apply to ‘from-for’ discounts. The basic principle is that the discount is given on the lowest price that was charged in the 30 days before the discount. There are a few exceptions to this rule: (i) for perishable products; (ii) for products that have been on the market for less than 30 days; and (iii) for stacking discounts.
It is also interesting to note that the European Commission (the Commission) has updated its guidance on the Unfair Commercial Practices Directive. The Unfair Commercial Practices Directive prohibits commercial practices that are misleading or aggressive. A significant update is the clarity provided in relation to the digital sector. The guidance makes it clear that using fake user reviews or withholding negative reviews may constitute an unfair commercial practice. The use of dark patterns such as confirm shaming (in which consumers are made to feel guilty for cancelling a service) may also constitute an unfair trade practice. It also addresses misleading influencer marketing, advertising practices targeting children, and other topics in the digital sector.
An important development is that ACM has accepted the commitments given by two clothing and sportswear chains regarding false (or potentially false) sustainability claims. The clothing and sportswear chains have agreed to clarify the sustainability claims on their clothing and websites. Interestingly, instead of imposing a fine or demanding compensation, ACM agreed to them donating an amount to various sustainability initiatives as ‘compensation’.
Together with Norwegian consumer authority NCA, ACM has furthermore issued guidelines on how the clothing industry can use the Higg materials sustainability index (Higg MSI) in their sustainability communications to customers. Big brands can use this index in a misleading manner. ACM and the NCA therefore recommend in the guidelines to make better use of the Higg MSI.
Energy suppliers Vattenfall and Greenchoice have also pledged to change or stop using certain sustainability claims on their websites. They have promised to inform consumers more clearly, to avoid the risk of misleading them as regards sustainability. Again, ACM did not impose a fine, because it agreed to both companies donating to various sustainability initiatives (see also this blog). Another investigation is ongoing in the dairy sector. A pack of milk often states, for instance, that it is ‘sustainable’ without it always being clear why that is allegedly the case. These claims may also be misleading, according to ACM.
ACM also completed a survey into CO2 offsetting when buying airline tickets. It investigated the extent to which consumers understand claims about CO2 offsetting when buying an airline ticket, what consumers think of these claims, and how they affect their purchase decisions. The survey has shown that terms such as ‘CO2 neutral’ are poorly understood. Consumers also have little confidence in CO2 offsetting claims. Independent certificates and clear explanations would help, however. The price remains the predominant factor for most consumers when buying an airline ticket.
Another development is the Commission’s proposal to amend two directives to empower consumers in the context of a circular, clean and green EU economy. The aim is to enable consumers to make informed purchasing decisions and thus to contribute to more sustainable consumption. This aim is to be achieved by better informing consumers about sustainability and the reparability of certain products before entering into a contract. Better protection against unfair commercial practices should also contribute to achieving this aim, such as protection against greenwashing (misleading environmental claims), premature obsolescence (early failure of products) or the use of unreliable and unclear sustainability claims.
Rules of thumb for sustainability claims
ACM’s Guidelines on Sustainability Claims contain five rules of thumb regarding the use of sustainability claims by companies when offering products or services to consumers. Making incorrect claims constitutes greenwashing: a misleading commercial practice consisting of claiming that products are more sustainable than they actually are. Below, the main tips for companies are listed again on the basis of the Guidelines (see this, this, this and this blog for earlier tips).
Tip 1 – Make it clear what sustainability benefit the product offers
It should be clear at a glance what the sustainability benefit is:
- Describe the sustainability benefit clearly and understandably
- Describe what the sustainability benefit means in concrete terms
- Be honest about the product’s sustainability
- Be careful when using protected terms, such as ‘organic’ or ‘climate neutral’
Tip 2 – Substantiate sustainability claims with facts and keep them up to date
Companies must be able to prove their sustainability claims, which must also be regularly reviewed and adjusted where necessary. Companies must also be able to explain how they arrived at the sustainability claim.
Tip 3 – Comparisons with other products, services or companies must be fair
Sustainability claims may include comparisons such as ‘30% more fuel-efficient’. This is permitted provided that as it is clear what the product has been compared with.
Tip 4 – Be honest and concrete about your company’s sustainability efforts
Companies must strictly distinguish between their own sustainability efforts and the sustainability claims of a specific product. General information on sustainability efforts (such as ‘towards 100% sustainability’) may not be used to make a product appear sustainable.
Tip 5 – Make sure that visual claims and labels are helpful to consumers
Visual sustainability claims and labels must send a clear message instead of creating a false impression about a product’s characteristics, and must directly support the sustainability claim. If labels are used, it must be clear what the label stands for and what criteria apply to it. A label is considered trustworthy if it is introduced and verified by an independent body.
More information on consumer rules can be found at consumentenrecht.info
Information on dawn raids by ACM can be found at invalacm.nl