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Discover thought leadership and legal insights by our legal experts from across CMS. In our Expert Guides, written by CMS lawyers from across the jurisdictions where we operate, we provide you with in-depth legal research and insights that can be read both online and offline. You can also find Law-Now articles with focused legal analysis, commentary and insights to help you anticipate future challenges and much more.

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26 May 2021
Belt and Road Ini­ti­at­ive
China’s Belt and Road Ini­ti­at­ive (BRI) con­tin­ues to evolve and of­fer op­por­tun­it­ies for na­tions, com­munit­ies and busi­nesses. But it is not without con­tro­versy in areas such as en­vir­on­ment­al pro­tec­tion and in­ter­na­tion­al debt.As a lead­er in many Belt and Road sec­tors, CMS has polled and in­ter­viewed over 500 BRI par­ti­cipants around the world, about their cur­rent think­ing on BRI and the pro­spects they see for it. This series of re­ports ana­lyses sen­ti­ment around the world, con­siders what BRI means for each re­gion, shines a spot­light on dif­fer­ent na­tions and high­lights leg­al con­sid­er­a­tions. You can ac­cess the full series of re­gion­al re­ports be­low.16%me­di­um16%me­di­um16%me­di­um16%me­di­um16%me­di­um16%me­di­um
12 May 2021
CMS Glob­al Fintech Up­date
The leg­al frame­work in the fintech in­dustry is chan­ging very quickly and some­times var­ies greatly from jur­is­dic­tion to jur­is­dic­tion.Our glob­al up­date, will give you an over­view of the latest changes and top­ics we have been deal­ing with in Europe, Africa and Lat­in Amer­ica re­gion. This will give you an at a glance sum­mary of a num­ber of art­icles that we have pro­duced on a loc­al basis.For a more in-depth ana­lys­is or for any ques­tions, please reach out to your usu­al CMS con­tact or lis­ted be­low Fintech ex­perts.
12 May 2021
Sus­tain­ab­il­ity and gre­en­wash­ing – the Dutch view
Con­sumers in­creas­ingly con­sider sus­tain­ab­il­ity when mak­ing pur­chases. As a res­ult, more and more com­pan­ies are us­ing sus­tain­ab­il­ity claims on the pack­aging of their products and in ad­vert­ise­ments. This prac­tice, how­ever, cre­ates the risk of "gre­en­wash­ing": the dis­sem­in­a­tion of dis­in­form­a­tion to present an en­vir­on­ment­ally re­spons­ible pub­lic im­age by us­ing mis­lead­ing word­ing or vague claims. Ac­cord­ing to the Dutch Au­thor­ity for Con­sumer & Mar­kets ("ACM"), gre­en­wash­ing can re­duce con­sumer trust and lead to un­fair com­pet­i­tion. To ad­dress this, the ACM has re­cently pub­lished guidelines on sus­tain­ab­il­ity claims. Con­sumers and or­gan­isa­tions also seem to be alert to the is­sue of gre­en­wash­ing. Sev­er­al com­plaints about sus­tain­ab­il­ity claims have been sub­mit­ted to the Ad­vert­ising Code Com­mit­tee ("ACC") in the re­cent years. This art­icle dis­cusses the guidelines on sus­tain­ab­il­ity claims of the ACM and the AC­C's ap­proach to sus­tain­ab­il­ity claims. ACM Guidelines on Sus­tain­ab­il­ity Claims Sus­tain­ab­il­ity is one of ACM's key pri­or­it­ies in 2021. The ACM, which not only su­per­vises com­pet­i­tion law but also un­fair com­mer­cial prac­tices in the Neth­er­lands, pub­lished the fi­nal ver­sion of their Guidelines on Sus­tain­ab­il­ity Claims on 28 Janu­ary 2021. Two days earli­er it had already pub­lished its fi­nal draft Guidelines on Sus­tain­ab­il­ity Agree­ments on the ap­plic­a­tion of com­pet­i­tion law to sus­tain­ab­il­ity agree­ments between un­der­tak­ings.The Guidelines on Sus­tain­ab­il­ity Claims con­tain five rules of thumb that are ex­plained us­ing vari­ous ex­amples. First, com­pan­ies should make clear the sus­tain­ab­il­ity be­ne­fits that a giv­en product of­fers. Second, the sus­tain­ab­il­ity claims used must be sub­stan­ti­ated with facts and kept up-to-date. Third, com­par­is­ons with oth­er products, ser­vices or com­pan­ies must be fair. Fourth, com­pan­ies must be hon­est and spe­cif­ic about their sus­tain­ab­il­ity ef­forts. Lastly, visu­al claims and la­bels should be help­ful to con­sumers and not con­fus­ing.Upon its pub­lic­a­tion, the ACM com­mu­nic­ated that its Guidelines on Sus­tain­ab­il­ity Claims would serve as basis for en­force­ment by its con­sumer pro­tec­tion de­part­ment. Three months later, on 3 May 2021, the ACM com­mu­nic­ated that it had in­deed launched in­vest­ig­a­tions in three sec­tors in which it pre­vi­ously had found many po­ten­tially mis­lead­ing claims: en­ergy, di­ary and clothes. Over 170 com­pan­ies act­ive in these sec­tors re­ceived let­ters from the ACM in which they were asked to check the ac­cur­acy of their sus­tain­ab­il­ity claims. In the let­ters, the ACM an­nounced that as from 14 June 2021 it would as­sess the ef­fects of its ac­tion and start fin­ing com­pan­ies that still com­mu­nic­ate claims they can­not ful­fil.The ACM can sanc­tion a vi­ol­a­tion by im­pos­ing an ad­min­is­trat­ive fine of up to EUR 900,000 or 1% of the gross turnover. Dutch Ad­vert­ising Code The Neth­er­lands also has a self-reg­u­lat­ing sys­tem re­gard­ing ad­vert­ising, which in­cludes la­belling. The ACC is the body deal­ing with this sys­tem and the rules on ad­vert­ising are con­tained in the Dutch Ad­vert­ising Code (“DAC”). Any­one who be­lieves that an ad­vert­ise­ment vi­ol­ates the DAC can sub­mit a com­plaint to the ACC. In case of a DAC vi­ol­a­tion, the ACC will up­hold the com­plaint and re­com­mend that the ad­vert­isers in­volved dis­con­tin­ue this ad­vert­ising. The ACC can­not grant dam­ages or im­pose any fines. However, over 95% of all ACC re­com­mend­a­tions are re­spec­ted due to the AC­C's policy of "nam­ing and sham­ing" – pub­lish­ing the names of ad­vert­isers un­will­ing to com­ply and co­oper­ate on the ACC web­site. Spe­cial Ad­vert­ising Code for En­vir­on­ment­al Ad­vert­ising Sus­tain­ab­il­ity claims can be seen as en­vir­on­ment­al claims. This means that the Spe­cial Ad­vert­ising Code for En­vir­on­ment­al Ad­vert­ising ("CEA") is ap­plic­able. The CEA ap­plies to the en­tire life cycle of all goods and ser­vices – from pro­duc­tion to waste pro­cessing. Based on Art­icle 3 CEA, en­vir­on­ment­al claims must be demon­strably cor­rect and since en­vir­on­ment­al claims are of­ten for­mu­lated in ab­so­lute terms, stricter re­quire­ments are im­posed on the evid­ence the ad­vert­iser must provide. Ad­vert­ising Code Com­mit­tee The im­port­ance of fact-based proof in sus­tain­ab­il­ity claims was high­lighted in sev­er­al ACC judg­ments. For ex­ample, the ACC ruled that the claim "100% com­postable" on Bioodi cof­fee cups was mis­lead­ing be­cause Bioodi could only demon­strate through test res­ults that the cof­fee cups were 90% com­postable (ACC 9 March 2020, 2020/00059). Ac­cord­ing to the ACC, the as­sump­tion that a 90% de­grad­a­tion dur­ing the test peri­od ul­ti­mately means that the cof­fee cups are 100% com­postable is in­con­sist­ent with the re­quire­ment of Art­icle 3 CEA that an en­vir­on­ment­al claim must be demon­strably cor­rect.Fur­ther­more, the ACC con­sidered the claim "This plastic bag is en­vir­on­ment­ally friendly" mis­lead­ing since en­vir­on­ment­ally harm­ful fossil en­ergy was needed for both the man­u­fac­ture and re­cyc­ling of the bag (ACC 24 Ju­ly 2014, 2014/00325).The claim “our pack­aging is 100% re­cyc­lable” on plastic bottles of Coca-Cola was not con­sidered to be in vi­ol­a­tion of Art­icle 3 CEA of the ACC be­cause Coca-Cola had suf­fi­ciently sub­stan­ti­ated that its bottles are made of fully re­cyc­lable ma­ter­i­als. It did so by cit­ing the guidelines of the European PET Bottle Plat­form and demon­strat­ing that its bottles are made from trans­par­ent PET, which is con­sidered a re­cyc­lable ma­ter­i­al based on these guidelines (ACC 20 Decem­ber 2017, ACC 2017/00812). The ACC noted that the claim "100% re­cyc­lable" does not mean that the ma­ter­i­als ac­tu­ally have to be 100% re­cycled.Green­peace, the party that filed the claim, also charged that the com­pany was in vi­ol­a­tion of Art­icle 10 CEA since the re­cyc­ling of half-litre bottles in­to new Coca-Cola bottles did not take place in prac­tice. Art­icle 10 CEA states that en­vir­on­ment­al claims re­lated to the re­cyc­ling of products or parts of products are per­miss­ible only if a suf­fi­cient pro­por­tion of the re­com­men­ded products or parts are ac­tu­ally re­cycled. Coca-Cola provided a re­port from Sticht­ing Ned­vang, which re­gisters the col­lec­tion and re­cyc­ling of all pack­aging waste in the Neth­er­lands, show­ing that 70% of small bottles in the Neth­er­lands are re­cycled and a part of those bottles are used in new bottles. The ACC con­sidered this suf­fi­cient evid­ence to meet the cri­ter­ia of Art­icle 10 CEA. Con­clu­sion The above ex­amples show that sus­tain­ab­il­ity claims re­quire care­ful con­sid­er­a­tion since Dutch reg­u­lat­ors, con­sumers and or­gan­isa­tions pay close at­ten­tion to these claims. Or­gan­isa­tions that are act­ive in the Neth­er­lands are ad­vised to re­con­sider the use of cer­tain sus­tain­ab­il­ity claims and as­sess wheth­er they can demon­strate the ac­cur­acy of these claims when re­ques­ted.
12 May 2021
Sus­tain­ab­il­ity and Com­pet­i­tion Law
Over the last year, there has been in­creased in­terest and ap­pet­ite from dif­fer­ent mar­ket play­ers and com­pet­i­tion reg­u­lat­ors in the in­ter­ac­tion between sus­tain­ab­il­ity and com­pet­i­tion law. This has led to the de­vel­op­ment of com­ment­ary from dif­fer­ent sources, and guid­ance pa­pers from some of the more pro-act­ive reg­u­lat­ors. The move­ment is linked to the EU’s strong com­mit­ment to sus­tain­ab­il­ity and to be­com­ing the first cli­mate-neut­ral con­tin­ent in the world through the Com­mis­sion’s am­bi­tious European Green Deal. A num­ber of re­cur­ring ques­tions are gain­ing at­ten­tion in re­la­tion to calls for com­pet­i­tion laws to sup­port sus­tain­ab­il­ity ini­ti­at­ives. On the one hand, some play­ers pro­pose that com­pet­i­tion law holds back sus­tain­ab­il­ity col­lab­or­a­tion ini­ti­at­ives. On the oth­er hand, some reg­u­lat­ors have also high­lighted that they have not been ap­proached with con­crete sus­tain­ab­il­ity col­lab­or­a­tion is­sues or pro­pos­als by in­dustry. A con­cern raised by reg­u­lat­ors is wheth­er un­der­tak­ings would really be more eco-friendly if com­pet­i­tion rules were re­laxed, or if leav­ing "green" de­vel­op­ments to the devices of a more com­pet­it­ive mar­ket would lead to green­er res­ults in prac­tice.A cent­ral ques­tion is how to meas­ure any per­ceived "ef­fi­cien­cies" versus anti-com­pet­it­ive ef­fects. An­oth­er is wheth­er there is really any need to es­tab­lish a "safe har­bour" for "sus­tain­able" col­lab­or­at­ive ar­range­ments. Tra­di­tion­ally, com­pet­i­tion law rules on col­lab­or­a­tion look at the ef­fects on the con­sumer in the rel­ev­ant mar­ket (i.e. the con­sumer who pur­chased the product). This is to as­sess wheth­er they have been fully com­pensated. However, sus­tain­ab­il­ity be­ne­fits are more likely to trans­late in­to a com­bin­a­tion of some dir­ect be­ne­fit to the in­di­vidu­al con­sumer, with oth­er be­ne­fits be­ing en­joyed by the wider so­ci­ety at large, or even by the fu­ture wider so­ci­ety at large. As­pects of sus­tain­ab­il­ity ar­gu­ments in re­la­tion to mer­ger con­trol and state aid are also gain­ing in­creased at­ten­tion.It is there­fore a good time to take stock of where we are with the dif­fer­ent ini­ti­at­ives and de­vel­op­ments across Europe so far: European Uni­on The Com­mis­sion’s DG Com­pet­i­tion re­cently looked more closely in­to sus­tain­ab­il­ity and com­pet­i­tion law. It is spe­cific­ally re­cog­nised by EVP Vestager that as part of the European Green Deal "All of Europe’s policies – in­clud­ing com­pet­i­tion policy – will have their role to play to get us there". EU Com­pet­i­tion policy already sup­ports the Green Deal ob­ject­ives, but it has been re­cog­nised that as Europe’s am­bi­tions shift "in­to a high­er gear, we need to see if com­pet­i­tion policy could do more". Ac­cord­ingly, a num­ber of con­sulta­tions on ex­ist­ing com­pet­i­tion le­gis­la­tion were launched over the last year, in­volving po­ten­tial sus­tain­ab­il­ity as­pects. These in­cluded the re­vi­sion of the frame­work for both ho­ri­zont­al and ver­tic­al agree­ments, and the re­vi­sion of state aid rules.Re­cently, DG Comp also act­ively ad­dressed the top­ic of sus­tain­ab­il­ity as a sub­ject in its own right. To this end, it launched a de­tailed con­sulta­tion in the second half of 2020, en­titled "Com­pet­i­tion Policy Sup­port­ing the Green Deal", and en­cour­aged all in­ter­ested stake­hold­ers to con­trib­ute. This ini­ti­at­ive provided an in­sight­ful set of ques­tions look­ing for views on state aid, an­ti­com­pet­it­ive agree­ments and mer­ger con­trol (while ex­clud­ing ab­use of dom­in­ance). It pub­lished the 189 con­sulta­tion re­sponses re­ceived in Janu­ary 2021.DG Comp also hos­ted a half-day pub­lic we­bin­ar on the sub­ject of Com­pet­i­tion policy and the Green Deal in Feb­ru­ary 2021. This dis­cussed a vari­ety of is­sues in­clud­ing an open­ing ad­dress by EVP Vestager and a key­note speech by EVP Tim­mer­mans. It also hos­ted a num­ber of dif­fer­ent pan­els look­ing at polit­ic­al am­bi­tion; in­nov­a­tion, green growth and the com­pet­i­tion rules; and what the cur­rent an­ti­trust, mer­ger con­trol, and state aid rules do de­liv­er, and what they don’t. An un­der­tak­ing was made for the three next im­port­ant fol­low up steps in DG Comp’s sus­tain­ab­il­ity jour­ney. The first is a pub­lic re­port on the in­put from the sus­tain­ab­il­ity con­sulta­tion pro­cess and de­bate, prom­ised be­fore the sum­mer of 2021. The second is to feed in­to the on­go­ing le­gis­lat­ive re­views. Last but not least, the third is the op­por­tun­ity to re­quest sus­tain­ab­il­ity guid­ance through guid­ance let­ters, or Art­icle 10 (Reg 1/2003) de­cisions. At the mo­ment, ma­jor changes to the EU leg­al frame­work seem un­likely. In his clos­ing re­marks for the we­bin­ar, Head of DG Com­pet­i­tion Olivi­er Guersent hin­ted at green ad­just­ments and cla­ri­fic­a­tions to re­flect sus­tain­ab­il­ity ob­ject­ives, rather than a re­lax­a­tion of com­pet­i­tion rules. Cla­ri­fic­a­tions will es­pe­cially con­cern co-op­er­a­tion and in­form­a­tion shar­ing. It is clear that we are not yet at the stage of com­mit­ted spe­cif­ic EU guidelines on sus­tain­ab­il­ity, and that there is still an im­port­ant choice to be made in the path to take. However, DG Comp has clearly il­lus­trated its ser­i­ous­ness and com­mit­ment to un­der­tak­ing a de­tailed and thor­ough eval­u­ation of how to pro­ceed. Neth­er­lands The road to sus­tain­ab­il­ity is paved with good in­ten­tions in the Neth­er­lands. In the re­cent past, the Dutch Au­thor­ity for Con­sumers and Mar­kets ("ACM") had been ac­cused of block­ing sus­tain­ab­il­ity ini­ti­at­ives due to an old-fash­ioned and overly ri­gid ap­proach to com­pet­i­tion law. It had not­ably con­sidered that the car­tel pro­hib­i­tion pre­ven­ted cross-sec­tor co­oper­a­tion re­gard­ing the selling of chick­en meat pro­duced un­der en­hanced an­im­al wel­fare-friendly con­di­tions (Chick­en of To­mor­row) and pre­ven­ted col­lab­or­a­tion in clos­ing down pol­lut­ing coal power plants. This ex­per­i­ence might have in­duced the Dutch com­pet­i­tion au­thor­ity to play an in­nov­at­ive role in the European de­bate on sus­tain­ab­il­ity and com­pet­i­tion law.In the sum­mer of 2020, the ACM launched a con­sulta­tion for re­vised guidelines on sus­tain­ab­il­ity, in­ten­ded to re­place its 2014 Vis­ion doc­u­ment on Com­pet­i­tion and Sus­tain­ab­il­ity. This was quickly fol­lowed by an­oth­er con­sulta­tion on guidelines for (mis­lead­ing) sus­tain­ab­il­ity claims. Ad­di­tion­ally, in Septem­ber 2020, it pub­lished a study that "Today's chick­en" is bet­ter off and its meat more sus­tain­able, even without cross-sec­tor col­lab­or­a­tion agree­ments. The ACM’s draft guidelines on sus­tain­ab­il­ity were per­ceived as bold and drew re­ac­tions, in­clud­ing from the European Com­mis­sion. On 26 Janu­ary 2021, a second draft of the ACM’s re­vised guidelines on sus­tain­ab­il­ity was pub­lished "ready for fur­ther dis­cus­sions in Europe". ACM an­nounced that dur­ing the dis­cus­sions it would not fine com­pan­ies that fol­lowed these draft guidelines in good faith.In the fi­nal draft, the ACM makes a clear­er dis­tinc­tion between "en­vir­on­ment­al-dam­age" agree­ments and oth­er "sus­tain­ab­il­ity" agree­ments. En­vir­on­ment­al-dam­age agree­ments con­cern the re­duc­tion of dam­age to so­ci­ety (not in­cluded in the price of pro­duc­tion) and more ef­fi­cient use of scarce nat­ur­al re­sources. This in­cludes en­vir­on­ment­al as­pects like glob­al warm­ing and re­duced biod­iversity. Sus­tain­ab­il­ity agree­ments are defined in the draft re­vised guidelines as be­ing aimed at the iden­ti­fic­a­tion, pre­ven­tion, re­stric­tion or mit­ig­a­tion of the neg­at­ive im­pact of eco­nom­ic activ­it­ies on people, an­im­als, the en­vir­on­ment, or nature. One of the most in­ter­est­ing con­cepts from a com­pet­i­tion law per­spect­ive is the ACM's point of view that a dif­fer­ent in­ter­pret­a­tion can be ap­plied to the nor­mal "ef­fi­ciency claim" that users should be al­lowed a fair share of the be­ne­fits of an agree­ment. In con­trast, the ACM states that it should be pos­sible to con­sider the be­ne­fits of parties oth­er than dir­ect users, such as the great­er pub­lic (e.g. in re­la­tion to the re­duc­tion of CO2-emis­sions). Wheth­er the fi­nal draft guidelines on sus­tain­ab­il­ity will re­ceive full sup­port from the European Com­mis­sion is still to be seen. Mean­while, the ACM's guidelines for (mis­lead­ing) sus­tain­ab­il­ity claims was launched sep­ar­ately on 28 Janu­ary 2021 and will serve as basis for en­force­ment by the ACM's con­sumer rights de­part­ment. United King­dom In the UK, the Com­pet­i­tion and Mar­kets Au­thor­ity ("CMA") has re­tained "cli­mate change and sup­port­ing the trans­ition to a low car­bon eco­nomy" as one of its pri­or­it­ies for 2021/2022. However, the steps taken by the CMA to date have been lim­ited. One area of fo­cus has been con­sumer pro­tec­tion – the launch­ing of a new pro­gramme of work at the end of 2020 to ex­am­ine mis­lead­ing en­vir­on­ment­al claims. The CMA has also launched a mar­ket study in­to elec­tric vehicle char­ging, which will con­clude by the end of 2021. The CMA has been one of the few com­pet­i­tion au­thor­it­ies to pub­lish ded­ic­ated guid­ance on en­vir­on­ment­al sus­tain­ab­il­ity agree­ments and com­pet­i­tion law. However, this guid­ance only sum­mar­ises the ex­ist­ing rules for self-as­sess­ing com­pli­ance with com­pet­i­tion law, and does not at­tempt to tackle some of the more chal­len­ging ques­tions in this area. The CMA has ac­know­ledged that this guid­ance is an "in­ter­im step", which sug­gests it will likely take fur­ther steps in this area.In its re­cently up­dated Mer­ger As­sess­ment Guidelines, the CMA has in­cluded en­vir­on­ment­al sus­tain­ab­il­ity as a re­cog­nised pos­sible rel­ev­ant "cus­tom­er be­ne­fit" (in­clud­ing to fu­ture cus­tom­ers) to be taken in­to ac­count in the as­sess­ment of a mer­ger. This is an in­ter­est­ing de­vel­op­ment, and one of the first "nods" to­wards sus­tain­ab­il­ity mer­ger ar­gu­ments by com­pet­i­tion reg­u­lat­ors. The CMA con­firmed that it is able to take in­to ac­count a broad­er range of ef­fi­cien­cies and be­ne­fits from a mer­ger as they ap­ply to con­sumers and so­ci­ety more gen­er­ally, in­clud­ing wheth­er a mer­ger may lead to a lower car­bon foot­print for the firm’s products. Con­clu­sion Policy op­tions on the ap­plic­a­tion of com­pet­i­tion laws to sus­tain­ab­il­ity agree­ments are still open, with some na­tion­al au­thor­it­ies (i.e. the Dutch ACM, but also the Greek HCC com­pet­i­tion reg­u­lat­or) lead­ing the way or at least giv­ing the busi­ness and leg­al com­munity (sus­tain­able) food for thought.As policy-mak­ing is in­creas­ingly sup­por­ted at both the EU and na­tion­al level by pub­lic con­sulta­tions, there will be many op­por­tun­it­ies for mar­ket play­ers to voice their ideas or con­cerns about this fu­ture-fa­cing is­sue. Do not miss the chance to let your voice be heard!
12 May 2021
Sus­tain­ab­il­ity and gre­en­wash­ing – the Itali­an view
The fight against cli­mate change is a ma­jor chal­lenge for in­dustry.Com­pan­ies in the in­dus­tri­al sec­tor are aware of the in­creased sens­it­iv­ity of con­sumers to sus­tain­ab­il­ity since the en­vir­on­ment­al im­pact of their products is one of the key factors in­flu­en­cing com­mer­cial choices and pur­chas­ing de­cisions. However, be­cause of the grow­ing im­port­ance of the cri­ter­ia by which a product can be con­sidered "sus­tain­able", ad­vert­ising mes­sages em­phas­ising the en­vir­on­ment­al vir­tues of a product with the aim of mak­ing it more at­tract­ive must be for­mu­lated in a way that en­sures con­sumer pro­tec­tion.The Itali­an In­sti­tute of Ad­vert­ising Self-Reg­u­la­tion (Isti­tuto di Autodis­cip­lina Pub­bli­cit­ar­ia – IAP), as the reg­u­lat­ing body for the en­tire ad­vert­ising sec­tor, tackled the is­sue of ad­vert­ising com­mu­nic­a­tions re­gard­ing the pro­tec­tion of the nat­ur­al en­vir­on­ment, in­tro­du­cing in­to its own Code of Reg­u­la­tion a rule that com­mer­cial com­mu­nic­a­tions claim­ing or sug­gest­ing en­vir­on­ment­al or eco­lo­gic­al be­ne­fits must be based on truth­ful, per­tin­ent and sci­en­tific­ally veri­fi­able evid­ence and must al­low for a clear un­der­stand­ing of the char­ac­ter­ist­ics of the ad­vert­ised product or ser­vice, which the claimed be­ne­fits refer to.When ad­vert­ising their products, com­pan­ies of­ten use terms such as "sus­tain­able", "eco­lo­gic­al", "en­vir­on­ment­ally friendly" or "zero im­pact" with the aim of at­tract­ing the at­ten­tion of sus­tain­ab­il­ity-con­scious con­sumers. Gre­en­wash­ing (i.e. the mar­ket­ing strategy of giv­ing an en­vir­on­ment­ally pos­it­ive im­age to a com­pany or a product even in de­fault of ob­ject­ive cri­ter­ia or re­li­able or veri­fi­able sci­entif­ic data) is an ex­ample of mis­lead­ing ad­vert­ising that can res­ult in sanc­tions.Large com­pan­ies op­er­at­ing in the con­sumer products sec­tor are closely reg­u­lated. The Itali­an Com­pet­i­tion Au­thor­ity (Autor­ità Garan­te per la Con­cor­renza ed il Mer­cato – AGCM) plays a key role in pro­tect­ing con­sumers from mis­lead­ing ad­vert­ising in mes­sages pro­mot­ing the en­vir­on­ment­al vir­tues of products that are ac­tu­ally highly un­sus­tain­able.Some not­able de­cisions in­volved min­er­al wa­ter firms present­ing their products as en­vir­on­ment­ally sus­tain­able by us­ing what they claimed to be bet­ter per­form­ing bot­tling ma­ter­i­als (e.g. ones with less plastics) and con­sequently lower amounts of en­ergy in the pro­duc­tion of these ma­ter­i­als. However, in­ad­equate evid­ence for the re­li­ab­il­ity and truth­ful­ness of the ad­vert­ise­ments led the AGCM to rule that the claims were mis­lead­ing.An­oth­er sig­ni­fic­ant case in terms of the fine is­sued (EUR 5 mil­lion) con­cerned a mul­tina­tion­al com­pany in­volved in fuel pro­duc­tion that is­sued an ad­vert­ise­ment claim­ing the pos­it­ive en­vir­on­ment­al im­pact of a cer­tain type of fuel due to its char­ac­ter­ist­ics, fuel sav­ings and re­duc­tions in gas emis­sions. The AGCM found that these claims were not sub­stan­ti­ated.In or­der to avoid the mis­lead­ing ef­fects of Gre­en­wash­ing prac­tices, ad­vert­ising com­mu­nic­a­tions must be ob­ject­ively veri­fi­able or val­id­ated by in­de­pend­ent third parties. All ad­vert­ising about the sus­tain­ab­il­ity of a product must be ap­pro­pri­ate and cor­rect since the erad­ic­a­tion of Gre­en­wash­ing is an im­port­ant part of the glob­al re­sponse to the cur­rent cli­mate emer­gency.
12 May 2021
Cir­cu­lar Eco­nomy: re­cent meas­ures to en­hance re­pair­ab­il­ity of elec­tric...
To say that the Law 2020-105 of Feb­ru­ary 2020 on the Cir­cu­lar Eco­nomy has turned the French mar­ket for elec­tric and elec­tron­ic equip­ment (EEE) up­side down is an un­der­state­ment.The new re­quire­ments spe­cif­ic to the sale of EEE in France are ex­plained be­low. Man­dat­ory Re­pair­ab­il­ity Rat­ing for EEE placed on the French mar­ket The newly in­tro­duced Re­pair­ab­il­ity Rat­ing aims to in­form con­sumers of their abil­ity to re­pair the EEE they ac­quire. It has been man­dat­ory since Janu­ary 2021 al­though France an­nounced there would be no en­force­ment be­fore 2022.The Re­pair­ab­il­ity Rat­ing must be es­tab­lished by the man­u­fac­turer or Im­port­er on the basis of spe­cif­ic cri­ter­ia (such as re­mov­ab­il­ity and the price of spare parts) and com­mu­nic­ated down the dis­tri­bu­tion chain to the con­sumer.  There is no ob­lig­a­tion to in­dic­ate the Re­pair­ab­il­ity Rat­ing dir­ectly on the product it­self or on its pack­aging. Yet, it must be provided to the con­sumer at the time of pur­chase, even for on­line sales. Ad­dress­ing ‘planned ob­sol­es­cence’ The Law on the Cir­cu­lar Eco­nomy has in­tro­duced new pro­vi­sions to bet­ter ad­dress ‘planned ob­sol­es­cence’, defined as the use of tech­niques de­lib­er­ately aimed at re­du­cing a pro­duct's lifespan in or­der to in­crease its re­place­ment rate.Not­ably, the Law in­tro­duced pro­hib­i­tions on tech­niques (in­clud­ing via soft­ware) in­ten­ded to pre­vent re­pair or re­con­di­tion­ing of a device out­side its ap­proved cir­cuits and on agree­ments or prac­tices lim­it­ing ac­cess by in­de­pend­ent pro­fes­sion­al re­pairers to spare parts, in­struc­tions for use, tech­nic­al in­form­a­tion or any means ne­ces­sary for the re­pair of a product.The Law also con­tains spe­cif­ic pro­vi­sions on devices de­signed to al­low self-re­pair. Avail­ab­il­ity of spare parts Un­der the Law, a man­u­fac­turer of a good must provide in­form­a­tion to the dis­trib­ut­or on the avail­ab­il­ity or non-avail­ab­il­ity of spare parts ne­ces­sary to re­pair this good. This in­form­a­tion must be passed down by the dis­trib­ut­or to the con­sumer be­fore the sale.It is man­dat­ory to sup­ply avail­able spare parts to pro­fes­sion­al dis­trib­ut­ors or re­pairers who re­quest them. Be­gin­ning Janu­ary 2022, sup­ply will have to take place with­in 15 work­ing days of a re­quest.Also in Janu­ary 2022, the fol­low­ing re­quire­ments will ap­ply to EEE:For all elec­tric and elec­tron­ic equip­ment, there will be a pre­sump­tion of un­avail­ab­il­ity of spare parts if no in­form­a­tion on avail­ab­il­ity is provided;For house­hold ap­pli­ances, small IT and tele­com­mu­nic­a­tions equip­ment, screens and mon­it­ors, avail­ab­il­ity of spare parts will be­come man­dat­ory for at least five years from the pla­cing on the mar­ket of the last unit;For ‘in­dis­pens­able’ spare parts no longer avail­able that can be man­u­fac­tured by 3D print­ing, man­u­fac­tur­ing plans will have to be provided to pro­fes­sion­al dis­trib­ut­ors or re­pairers upon re­quest wheth­er ap­proved or not;Of­fer­ors of pro­fes­sion­al main­ten­ance and re­pair ser­vices will have to provide at least one of­fer for parts from the cir­cu­lar eco­nomy in­stead of new parts. Right to soft­ware up­dates For goods with di­git­al ele­ments, the Law on the Cir­cu­lar Eco­nomy Law man­dated new re­quire­ments, which are an early trans­pos­i­tion of EU Dir­ect­ive 2019/771 on con­tracts for the sale of goods.These new re­quire­ments cov­er:man­dat­ory in­form­a­tion on soft­ware up­dates (in­clud­ing se­cur­ity up­dates) and their in­stall­a­tion ne­ces­sary to main­tain the con­form­ity of goods with di­git­al ele­ments;the pro­vi­sion of up­dates ne­ces­sary to main­tain the con­form­ity of the goods for up to two years;man­dat­ory in­form­a­tion on the peri­od of time that soft­ware up­dates re­main com­pat­ible with the nor­mal use of the device;pre-con­trac­tu­al in­form­a­tion on the ex­ist­ence of any re­stric­tions on the in­stall­a­tion of soft­ware.Last year, France no­ti­fied the European Com­mis­sion un­der the TRIS pro­ced­ure of an im­ple­ment­ing de­cree on con­sumer in­form­a­tion re­lat­ing to soft­ware up­dates for goods with di­git­al ele­ments. This de­cree will likely be ad­op­ted at the end of the first quarter of 2021.Tech­nic­al Reg­u­la­tion In­form­a­tion Sys­tem or TRIS no­ti­fic­a­tion is re­quired un­der Dir­ect­ive (EU) 2015/1535 and aims to pre­vent bar­ri­ers to the in­tern­al mar­ket, which are likely to be cre­ated by the in­tro­duc­tion of new na­tion­al tech­nic­al reg­u­la­tions. What to ex­pect next Al­though the im­ple­ment­ing de­crees of the Law on the Cir­cu­lar Eco­nomy have not yet all been ad­op­ted, France's par­lia­ment is cur­rently de­bat­ing a new bill on the “En­vir­on­ment­al Foot­print of Di­git­al Tech­no­logy”, which in­tends to lim­it the re­new­al of di­git­al devices by tak­ing even more drastic steps such as:re­quir­ing man­u­fac­tur­ers of elec­tron­ic devices to of­fer cor­rect­ive up­dates for up to five years;al­low­ing con­sumers, who have in­stalled an up­date to soft­ware sup­plied at the time of pur­chase, the abil­ity to re­store pre­vi­ous ver­sions of this soft­ware for up to two years;or ex­tend­ing the leg­al guar­an­tee of con­form­ity for di­git­al equip­ment from two to five years.If you would like to know more about the Law on Cir­cu­lar eco­nomy, con­sult our full dossier on­line.
12 May 2021
Turk­ish Eco­l­a­bel pro­motes re­spons­ible products and the en­vir­on­ment
The 'E­col­a­bel' sign is a vol­un­tary re­ward sys­tem that is avail­able in Tur­key and coun­tries around the world, which pro­motes en­vir­on­ment­ally friendly products and provides con­sumers with val­id and ac­cur­ate sci­entif­ic in­form­a­tion about the products. Back­ground: Eco­l­a­bel comes to Tur­key The in­ter­na­tion­al Eco­l­a­bel vol­un­tary re­ward sys­tem was in­tro­duced in Tur­key on 19 Oc­to­ber 2018 with the en­act­ment of the "Eco­l­a­bel Reg­u­la­tion" (“Reg­u­la­tion”).The Reg­u­la­tion is the primary le­gis­la­tion en­for­cing the Eco­l­a­bel sys­tem in Tur­key and is im­ple­men­ted and mon­itored by the Min­istry of En­vir­on­ment and Urb­an­isa­tion ("Min­istry") and the Gen­er­al Dir­ect­or­ate of En­vir­on­ment­al Im­pact As­sess­ment, Per­mits and In­spec­tions.Any product or ser­vice pro­duced and dis­trib­uted in Tur­key and im­por­ted in­to or ex­por­ted from Tur­key must meet the stand­ards of the Turk­ish sys­tem in or­der to be al­lowed to carry an Eco­l­a­bel.   The Reg­u­la­tion not only sets out the cri­ter­ia for as­sess­ing products and ser­vices. It also em­phas­ises that meas­ures and in­cent­ives should be taken to in­crease de­mand for eco-labeled products and ser­vices, and states that eco-labeled products and ser­vices should be giv­en pref­er­ence in pub­lic pro­cure­ment, as part of the over­all ef­fort to raise aware­ness of the des­ig­na­tion. What it takes to hold an Eco­l­a­bel The cri­ter­ia used to award an Eco­l­a­bel are dif­fer­ent for each product and ser­vice group. These cri­ter­ia aim at max­im­ising en­vir­on­ment­al per­form­ance by con­sid­er­ing the en­tire life cycle of a par­tic­u­lar ser­vice or product. When set­ting the cri­ter­ia for a group, of­fi­cials must as­sess wheth­er a par­tic­u­lar product or ser­vice does the fol­low­ing:Re­duces en­ergy con­sump­tion that af­fects cli­mate change and biod­iversity, and pro­motes re­new­able en­ergy;Gen­er­ates waste and pol­lu­tion that af­fects the en­vir­on­ment, in­clud­ing the dis­pers­al of emis­sions and pol­lut­ants;Mod­i­fies sub­stances harm­ful to health and the en­vir­on­ment and cre­ates safer sub­stances and pro­duc­tion meth­ods where tech­nic­ally feas­ible;Min­im­ises the en­vir­on­ment­al im­pact of products and ser­vices by ex­tend­ing their life and designs products so that they can be re­used;Bal­ances en­vir­on­ment­al be­ne­fits and harm while en­sur­ing that spe­cif­ic health and safety stand­ards are achieved at each stage of the life cycle of a product or ser­vice;Meets the stand­ards of TS EN ISO 14024 Type I En­vir­on­ment­al Im­pacts, Prin­ciples and Meth­ods and those of oth­er eco-labeled products;Con­siders as­so­ci­ated use and re­duces an­im­al test­ing as much as pos­sible. Ap­plic­a­tion To ob­tain an Eco­l­a­bel, a com­pany must ap­ply to the Min­istry. All ap­plic­a­tions must con­tain the ne­ces­sary in­form­a­tion and doc­u­ment­a­tion. Gen­er­ally, the fol­low­ing groups can ap­ply for an Eco­l­a­bel: pro­du­cers, man­u­fac­tur­ers, im­port­ers, ex­port­ers, ser­vice pro­viders, whole­salers and re­tail­ers, per­sons and in­sti­tu­tions. Upon ap­plic­a­tion, the Min­istry forms a com­mis­sion that pre­pares a tech­nic­al as­sess­ment re­port on wheth­er the ap­plic­ant's ser­vice or product meets Eco­l­a­bel cri­ter­ia. The re­port of this com­mis­sion is then sub­mit­ted to the Min­istry, which makes a fi­nal de­cision on the mat­ter, but may con­duct an in­vest­ig­a­tion or ob­tain ad­di­tion­al re­search if it deems it ne­ces­sary.Ac­cord­ing to the Reg­u­la­tion, the Min­istry may re­ject an ap­plic­a­tion in the fol­low­ing cases:If the product con­tains sub­stances clas­si­fied as tox­ic, dan­ger­ous to the en­vir­on­ment, car­ci­no­gen­ic, muta­gen­ic or tox­ic for re­pro­duc­tion un­der the Clas­si­fic­a­tion, La­beling and Pack­aging of Sub­stances and Mix­tures Reg­u­la­tion (Of­fi­cial Gaz­ette, 11 Decem­ber 2013).If the product con­tains chem­ic­als as defined in Art­icle 47 of the Reg­u­la­tion on the Re­gis­tra­tion, Eval­u­ation, Au­thor­isa­tion and Re­stric­tion of Chem­ic­als (Of­fi­cial Journ­al, 23 June 2017).If the product is one of the fol­low­ing: veter­in­ary and med­ic­al products, devices and tools as defined in the Med­ic­al Devices Or­din­ance (Of­fi­cial Gaz­ette, 7 June 2011) and the Veter­in­ary Products Or­din­ance (Of­fi­cial Gaz­ette, 24 Decem­ber 2011).If the product is feed or a food product. Con­clu­sion of an agree­ment and use of the Eco­l­a­bel Upon con­clu­sion of an agree­ment between the Min­istry and an eli­gible ap­plic­ant, that ap­plic­ant will be awar­ded an Eco­l­a­bel. In ad­di­tion to the cri­ter­ia that are clearly defined for each product or ser­vice group, the Min­istry may im­pose ad­di­tion­al ob­lig­a­tions through an agree­ment. The own­er of the Eco­l­a­bel must use the sign in ac­cord­ance with the Reg­u­la­tion and the terms of the agree­ment. If an own­er vi­ol­ates the agree­ment, the Min­istry may uni­lat­er­ally ter­min­ate it and re­voke per­mis­sion to use the Eco­l­a­bel des­ig­na­tion. In ad­di­tion, the own­er of an Eco­l­a­bel may uni­lat­er­ally ter­min­ate the agree­ment and re­nounce the right to use the Eco­l­a­bel by giv­ing three months' no­tice. The own­er of an Eco­l­a­bel must not pro­duce or be as­so­ci­ated with any ad­vert­ise­ment, state­ment, sign or logo, which is fac­tu­ally in­cor­rect, mis­lead­ing or dam­ages the in­teg­rity of the Eco­l­a­bel scheme. In ad­di­tion, the Min­istry may con­duct in­vest­ig­a­tions in­to the use of an Eco­l­a­bel at any time.
12 May 2021
Sus­tain­ab­il­ity and gre­en­wash­ing – the Ger­man view
"Re­cyc­lable", "car­bon neut­ral" or "bio­de­grad­able" – these la­bels re­veal how sus­tain­ab­il­ity plays a ma­jor role in ad­vert­ising. However, the lack of uni­form stand­ards and clear reg­u­la­tions makes it dif­fi­cult for com­pan­ies to en­sure full leg­al com­pli­ance when ad­vert­ising the en­vir­on­ment­al be­ne­fits of their products.Where­as in the past, price and qual­ity alone were of­ten the most rel­ev­ant factors for con­sumers when mak­ing a pur­chas­ing de­cision, the sus­tain­ab­il­ity of products and the sus­tain­ab­il­ity policies of com­pan­ies have be­come in­creas­ingly im­port­ant. Know­ing this, many com­pan­ies ad­vert­ise their products with a wide vari­ety of sus­tain­ab­il­ity claims that are sup­posed to show en­vir­on­ment­al friend­li­ness and cor­res­pond­ing cor­por­ate re­spons­ib­il­ity. Leg­ally, how­ever, such "sus­tain­ab­il­ity claims" are of­ten a chal­lenge. What ex­actly do claims such as "bio­de­grad­able" or "en­vir­on­ment­ally friendly" mean? And what re­quire­ments must be met in or­der to ad­vert­ise a product in this way? Sus­tain­able pro­duc­tion: "car­bon neut­ral" and "re­source friendly" The range of ad­vert­ising claims re­fer­ring to the en­vir­on­ment­ally friendly pro­duc­tion of goods is broad, ran­ging from rather vague state­ments such as "re­source friendly" to strong claims such as "CO2-neut­ral". From an ad­vert­ising law per­spect­ive, the first ques­tion to con­sider is con­sumer per­cep­tion of vague claims. Does "re­source friendly" mean that few­er raw ma­ter­i­als have been used or that the ma­ter­i­als used are more en­vir­on­ment­ally friendly? Does the claim refer to the use of less en­ergy or en­ergy that has been sus­tain­ably ob­tained? If the ad­vert­iser is not spe­cif­ic in its state­ments, he runs the risk of cre­at­ing mul­ti­fa­ceted mes­sages, which he must prove. Even sup­posedly clear state­ments such as "car­bon neut­ral", how­ever, re­quire closer ex­am­in­a­tion. Does this state­ment refer solely to pro­duc­tion on the ad­vert­iser­'s premises? Does it in­clude the ex­trac­tion of raw ma­ter­i­als, the lo­gist­ics across all dis­tri­bu­tion chains and also even­tu­al dis­pos­al? Is the com­pens­a­tion of car­bon di­ox­ide through the sup­port of cli­mate pro­jects per­miss­ible or must there be no car­bon di­ox­ide emis­sions?The ad­vert­iser must con­sider these ques­tions and the ex­pect­a­tions of con­sumers be­fore launch­ing a cam­paign. Ger­man case law shows that to prove the cor­rect­ness of ad­vert­ising it is not suf­fi­cient if ex­pert opin­ion is only offered dur­ing the tri­al. Sus­tain­able dis­pos­al: "com­postable" and "re­cyc­lable" Yel­low bin, brown bin, home com­post – many con­sumers are happy to con­trib­ute to sus­tain­ab­il­ity by sep­ar­at­ing waste in this way. Claims around "com­postable", "bio­de­grad­able" and "re­cyc­lable" are there­fore very pop­u­lar. The first ques­tion here is how to prove that a product meets the tech­nic­al re­quire­ments for re­cyc­ling or com­post­ing. DIN stand­ards are of­ten used for this pur­pose. Some­times, how­ever, the stand­ard that ap­plies is un­clear or a DIN stand­ard does not yet ex­ist for a par­tic­u­lar pro­cess, such as home com­post­ing.An­oth­er chal­lenge is the real­ity of waste man­age­ment. Even if a product meets the tech­nic­al re­quire­ments to be in­dus­tri­ally com­pos­ted or re­cycled, this does not auto­mat­ic­ally mean that such com­post­ing or re­cyc­ling ac­tu­ally takes place in prac­tice. Many of the ap­prox­im­ately 1,000 loc­al waste man­age­ment com­pan­ies in Ger­many do not yet have the tech­nic­al pre­requis­ites to ac­tu­ally re­cycle or com­post products dis­posed of via the yel­low or brown bins. Some fa­cil­it­ies are not set up for the long com­post­ing time or can­not re­cog­nise re­cyc­lable ma­ter­i­al. Ger­man courts are in­creas­ingly crit­ic­al of blanket claims about the com­posta­bil­ity and re­cyc­lab­il­ity of products, un­less it can be shown that such sus­tain­able ways of waste dis­pos­al are not only tech­nic­ally pos­sible but ac­tu­ally do take place. De­pend­ing on the in­di­vidu­al case, cla­ri­fy­ing in­form­a­tion (i.e. dis­claim­ers) should be used on the pack­aging to avoid the risk of mis­lead­ing ad­vert­ising. EU Com­mis­sion's "Green Deal" In­creas­ingly, sus­tain­ab­il­ity ad­vert­ising and claims are likely to be reg­u­lated. For the food in­dustry in par­tic­u­lar, stricter re­quire­ments at the EU level must be ex­pec­ted in the com­ing years.As part of the "European Green Deal" presen­ted in Decem­ber 2019, the EU Com­mis­sion has an­nounced a series of meas­ures to pro­mote the de­vel­op­ment of a sus­tain­able eco­nomy while set­ting uni­form rules and stand­ards. One of these meas­ures is the "From farm to fork" strategy. Among oth­er things, this strategy en­vis­ages that the Com­mis­sion will de­vel­op a uni­form leg­al frame­work for sus­tain­ab­il­ity ad­vert­ising and for the la­belling of sus­tain­able food. A leg­al frame­work for an an­im­al wel­fare la­bel is also to be cre­ated and the com­puls­ory nature of such a la­bel will be ex­amined. However, de­tails are still un­clear. The Com­mis­sion in­tends to sub­mit ini­tial reg­u­lat­ory pro­pos­als only in 2024.Over­all, nu­mer­ous leg­al ques­tions arise when product ad­vert­ise­ments in­clude "sus­tain­ab­il­ity claims". Much is still in flux here. Court de­cisions and new leg­al reg­u­la­tions are likely to tight­en the re­quire­ments in the com­ing years and hope­fully bring more clar­ity.
12 May 2021
Spot­light on Sus­tain­ab­il­ity - Con­sumer Products News­let­ter
Wel­come to our brand new edi­tion of the CMS Con­sumer Products News­let­ter!
12 May 2021
France's pen­alty for the use of green dot may not con­form with EU law –...
The Con­seil d'Etat (French Su­preme Ad­min­is­trat­ive Court) has sus­pen­ded the texts in­tro­du­cing a pen­alty for the use of the Green Dot mark in France as of 1 April 2021, fol­low­ing an ap­plic­a­tion for in­ter­im meas­ures by sev­er­al ma­jor trade as­so­ci­ations and the hold­er and li­censor of the Green Dot mark in the EU. Among the many meas­ures of law N° 2020-105 of 10 Feb­ru­ary 2020 aimed at pro­mot­ing a cir­cu­lar eco­nomy (the AGEC Law), France has in­tro­duced new product-mark­ing ob­lig­a­tions. Spe­cific­ally, France im­posed Tri­m­an mark­ing and a har­mon­ised Info-Tri as of 1 Janu­ary 2022. Con­versely, Art­icle L. 541-10-3 of the French En­vir­on­ment Code in its ver­sion linked to the AGEC Law spe­cific­ally provides that "signs and mark­ings that may lead to con­fu­sion as to the sort­ing or de­liv­ery rule for waste from the product" would be sub­ject to a pen­alty that would at least double the cost of the eco-con­tri­bu­tion due for waste man­age­ment by an eco-or­gan­isa­tion. Al­though the Green Dot was not named, the Min­is­ter of En­vir­on­ment's Or­der of 30 Novem­ber 2020, which was man­dated by this law, de­scribes pre­cisely and solely the Green Dot sign. The pen­alty for us­ing this sign is set out in the An­nex to the Or­der of 25 Decem­ber 2020 on the eco-or­gan­isa­tions of the house­hold pack­aging sec­tor. This an­nex goes in­to force on 1 April, ex­cept for cer­tain pack­aging ex­empt from sanc­tions dur­ing the trans­ition peri­od provided for in the or­der.On 15 March, the Con­seil d’Etat sus­pen­ded the ap­plic­a­tion of Or­der of 30 Novem­ber 2020 and the pro­vi­sions of the An­nex to the Or­der of 25 Decem­ber 2020, pending a de­cision on the mer­its of their leg­al­ity. In the light of the pre­lim­in­ary in­vest­ig­a­tion in­to the case, the Con­seil d’Etat ex­pressed ser­i­ous doubts about the leg­al­ity and pro­por­tion­al­ity of the con­tested pro­vi­sions in the light of EU law, and more par­tic­u­larly in light of Art­icle 34 of the TFEU, which pro­hib­its meas­ures hav­ing equi­val­ent ef­fect to a quant­it­at­ive re­stric­tion on im­ports.In this re­spect, the Con­seil d’Etat noted that, al­though it is in­dis­crim­in­ately ap­plic­able to all products mar­keted on the French mar­ket, wheth­er man­u­fac­tured in France or im­por­ted, the Green Dot pen­alty makes pack­aging bear­ing this sign more ex­pens­ive. This pen­alty thus has the ob­ject and ef­fect of dis­suad­ing pro­du­cers from us­ing this pack­aging in France by for­cing them to provide dif­fer­ent pack­aging with­in the EU – the Green Dot be­ing man­dat­ory in Spain and Cyprus – and to or­gan­ise com­part­ment­al­ised dis­tri­bu­tion cir­cuits. The Con­seil d'Etat noted that such pro­vi­sions can­not be re­garded as simple sales meth­ods, since the pres­sure they ex­ert on pro­du­cers af­fects the char­ac­ter­ist­ics of the products. Fur­ther­more, the Coun­cil of State con­sidered that the Min­istry of Eco­lo­gic­al Trans­ition did not provide proof that the dis­ap­pear­ance of the Green Dot sign would, on its own, change sort­ing habits or that any mis­un­der­stand­ing over the mean­ing of the "Green Dot" could be cor­rec­ted with less re­strict­ive meas­ures, such as is­su­ing ad­equate in­form­a­tion. Con­seil d'Etat, Ord. Référé, 15 March 2021, n°450160 et 450164, AFISE ao.Con­seil d'Etat, Ord. Référé, 15 March 2021, n°450160 et 450164, So­ciété Der Grüne Punkt Duales Sys­tem ao.
12 May 2021
Clean Meat: sus­tain­ab­il­ity re­volu­tion or vic­tim of reg­u­la­tion?
When it comes to sus­tain­able food, Clean Meat (i.e In-Vitro or Cul­tured Meat) is con­sidered by many to be the fu­ture. But al­though Clean Meat is prom­ising in terms of sus­tain­ab­il­ity and new sales mar­kets, the reg­u­lat­ory hurdles that pro­du­cers and re­tail­ers must over­come be­fore en­ter­ing the EU mar­ket are many and var­ied. This art­icle ex­am­ines the chal­lenges arising from the European Nov­el Food Reg­u­la­tion, European GMO law, and the spe­cial Ger­man re­quire­ments for the la­belling and ad­vert­ising of non-tra­di­tion­al meat products. A. Products and stage of de­vel­op­ment In the EU, tech­nic­al mar­ket­ab­il­ity of Clean Meat is with­in reach. Ar­ti­fi­cially pro­duced chick­en meat was re­cently ap­proved in Singa­pore. In 2013, a re­search team from Maastricht Uni­versity presen­ted its first bur­ger from the lab. While the pro­duc­tion costs at that time amoun­ted to EUR 250,000, a clean bur­ger can now be sold for less than USD 10. When they go on sale, costs should de­crease even more (in Ju­ly 2020, a prom­in­ent Clean Meat com­pany in the Neth­er­lands an­nounced that its cost of pro­duc­tion had fallen by 88%).The ad­vant­ages of Clean Meat are man­i­fold and could out­per­form con­ven­tion­al meat products on  every level: CO2 emis­sions are re­duced, fact­ory farm­ing is not ne­ces­sary and nat­ur­al re­sources are saved. Con­sum­ing Clean Meat can also be health­i­er for the con­sumer since there is less risk of con­tam­in­ants (e.g. no an­ti­bi­ot­ics are used) and the amount of cho­les­ter­ol is lower. The shift to Clean Meat is a re­sponse to in­creased de­mand for meat as meat con­sump­tion stead­ily grows, great­er sens­it­iv­ity for an­im­al wel­fare and the fight against cli­mate change. It is there­fore not sur­pris­ing that there is also strong in­vest­ment in Clean Meat in the EU. A European Clean Meat start-up at­trac­ted in­vest­ments totalling nearly nine fig­ures. B. Reg­u­la­tion on ge­net­ic­ally mod­i­fied food When it comes to selling Clean Meat in the EU, the first ques­tion to be answered is: Does the food con­tain ge­net­ic­ally mod­i­fied or­gan­isms (GMOs)? If the an­swer is yes, the food must be au­thor­ised by the European Com­mis­sion.In gen­er­al, it can be said that when it comes to mar­ket­ing food in the EU, there are hardly any high­er hurdles than those set by the GMF Reg­u­la­tion. The ap­prov­al pro­ced­ure of the EU Com­mis­sion is com­plex and time-con­sum­ing. Tak­ing in­to ac­count the time and ef­fort re­quired for the ap­plic­a­tion (in­clud­ing the per­form­ance of stud­ies, etc.), the par­ti­cip­a­tion of na­tion­al au­thor­it­ies, the as­sess­ment by the European Food Safety Au­thor­ity (EF­SA) and the ap­prov­al by the EU Com­mis­sion, the ap­prov­al pro­cess may be con­sid­er­ably longer than 12 months. In in­di­vidu­al cases, ap­prov­al may take years.However, des­pite the hurdles and re­quired ef­fort, good pre­par­a­tion, pro­fes­sion­al know-how and the right part­ners can bring suc­cess. C. Nov­el Food Reg­u­la­tion Even though Clean Meat does not con­tain ge­net­ic­ally mod­i­fied ma­ter­i­al, it re­quires ap­prov­al. This is be­cause in al­most all cases Clean Meat qual­i­fies as Nov­el Food in the sense of the Nov­el Food Reg­u­la­tion (see state­ment of the EU Com­mis­sion). These re­quire­ments are slightly less strict than those set down in the ge­net­ic en­gin­eer­ing law. An ap­prov­al is gran­ted to a nov­el food if it does not pose a safety risk to hu­man health, does not mis­lead con­sumers and, if it is in­ten­ded to re­place an­oth­er food, does not dif­fer from it in a way that would cause nu­tri­tion­al dis­ad­vant­ages for in­di­vidu­als when con­sumed nor­mally.Also, in con­nec­tion with the au­thor­isa­tion of a nov­el food, the dur­a­tion of the ap­prov­al pro­ced­ure must be taken in­to ac­count. Ac­cord­ing to of­fi­cial in­form­a­tion, it can take 18 to 24 months for a nov­el food product to re­ceive fi­nal ap­prov­al (or to be re­jec­ted). While this is a long time (es­pe­cially con­sid­er­ing that the products may not be mar­keted in the EU in the mean­time), pa­tience will be re­war­ded. In the event of ap­prov­al, the ap­plic­ant can ob­tain an ex­clus­ive right of use for five years in or­der to amort­ise de­vel­op­ment and ap­plic­a­tion costs.A food busi­ness op­er­at­or should not fear hav­ing to go through both pro­cesses (i.e. GMF Reg­u­la­tion and Nov­el Food Reg­u­la­tion). If GMO ap­prov­al is re­quired, Nov­el Food Reg­u­la­tion ap­prov­al is not ne­ces­sary. D. La­belling and ad­vert­ising The la­belling and ad­vert­ising of Clean Meat is a  na­tion­al is­sue. Al­though European Law (i.e. Food In­form­a­tion Reg­u­la­tion (EU) 1169/2011 [FIR] and Un­fair Com­mer­cial Prac­tices Dir­ect­ive 2005/29/EC) com­pre­hens­ively reg­u­lates food la­belling and ad­vert­ising law, the ques­tion of wheth­er the con­sumer un­der­stands la­bels and ad­vert­ising is de­term­ined by na­tion­al stand­ards. The ques­tion of how a food­stuff is to be named and how it may be ad­vert­ised can only be answered in each mem­ber state. In the fol­low­ing sec­tion, we demon­strate prob­lem­at­ic points arising in this con­text from Ger­man stand­ards. I. Name of the food Ac­cord­ing to Art. 17 FIR, pre-pack­aged food­stuffs must be provided with the name of the food. The name should provide in­form­a­tion about the type of food and its spe­cial char­ac­ter­ist­ics. In Ger­many, the guidelines of the Ger­man Food Book (Deutsches Lebens­mit­tel­buch) are es­pe­cially rel­ev­ant when it comes to the nam­ing of food in ac­cord­ance with Art. 17 FIR. A non-gov­ern­ment­al com­mis­sion ad­op­ted these non-le­gis­lat­ive guidelines, which have no bind­ing ef­fect, but are fre­quently re­ferred to by au­thor­it­ies and courts when it comes to the ques­tion of a food pro­duct's cor­rect and  non-mis­lead­ing name.Al­though neither the guidelines for meat nor the guidelines for ve­get­ari­an and ve­gan foods are likely ap­plic­able to Clean Meat (since this food does not come from a slaughtered an­im­al or any part of an an­im­al), some con­clu­sions can be drawn from the reg­u­la­tions. Ac­cord­ing to the guidelines for ve­get­ari­an and ve­gan food, meat-typ­ic­al terms such as "fil­let" and "steak" are not ac­cept­able for non-meat products (i.e. products that do not come from slaughtered an­im­als). The cur­rent guidelines seem to re­flect that ve­get­ari­an products pre­vi­ously had no meat-typ­ic­al char­ac­ter­ist­ics. This policy, how­ever, may not be sus­tain­able in this form in light of new tech­nic­al de­vel­op­ments.Con­sequently, it will be a chal­lenge to la­bel Clean Meat products with risk-free names, but still ac­cur­ately de­scribe each product. Each in­di­vidu­al case must be ex­amined and it must be de­term­ined wheth­er names like "Bur­ger", "Schnitzel" and "Steak" can be ap­plied to Clean Meats. II. Ad­vert­ising In the con­text of ad­vert­ising, it is par­tic­u­larly im­port­ant to pre­vent con­sumers from be­ing misled about the pro­duc­tion meth­od of the re­spect­ive meat product (i.e. tra­di­tion­al or in-vitro). For ex­ample, it could be prob­lem­at­ic if the pack­aging of a Clean Meat product shows an­im­als in a green land­scape.  Con­sumer know­ledge about nu­tri­tion­al val­ues and the health ad­vant­ages (or dis­ad­vant­ages) of Clean Meat vis-à-vis con­ven­tion­al meat will be lim­ited when mar­ket­ing be­gins. Hence, pre­cise in­form­a­tion will need to be com­mu­nic­ated. III. Oth­er la­belling is­sues Fi­nally, it should be noted that there are spe­cial la­belling ob­lig­a­tions for ge­net­ic­ally mod­i­fied food. For ex­ample, la­bels must ex­pli­citly state that the product or parts of it have been ge­net­ic­ally mod­i­fied. E. Con­clu­sion It can­not be denied that the mar­ket­ing of Clean Meat faces po­ten­tial high leg­al hurdles. Be­sides the chal­lenges for ap­provals, is­sues re­lated to la­belling and ad­vert­ising also per­sist. However, if these chal­lenges are un­der­stood and a pro­duct's entry in­to the mar­ket is care­fully pre­pared, these hurdles can be over­come in an eco­nom­ic­ally reas­on­able way.
05 May 2021
Im­pact of AI & Tech­no­logy on the Funds sec­tor
AI & Tech­no­logy are dis­rupt­ing the in­vest­ment funds sec­tor, and laws and reg­u­la­tions are be­ing amended to move to­wards a more di­git­al en­vir­on­ment for fin­an­cial in­sti­tu­tions, as­set man­agers and in­vestors...