08. Jul 22

Anticompetitive advertising touting climate-neutral status

Anyone who markets something as being “climate neutral” must explain in more detail how this is accomplished. That was the conclusion of the Landgericht (LG) Konstanz – the Regional Court of Constance – in a judgment from November 19, 2021 (case ref.: 7 O 6/21 KfH).

Despite being a popular selling point in advertising, we the commercial law firm MTR Rechtsanwälte note that it is often unclear what exactly is meant by “climate neutral”. That is why the Wettbewerbszentrale – Germany’s Center for Protection against Unfair Competition – has been pushing for greater transparency, demanding that businesses ensure that the advertising elaborates on how this is achieved. This approach was recently endorsed in a ruling from November 19, 2021 by the Landgericht Konstanz, which granted an action for an injunction brought by the Wettbewerbszentrale.

On the receiving end of this action was a supplier that had been marketing its heating oil as being climate neutral. No further information was provided regarding how this was being realized or what measures the company had taken to contribute to this end. The claim was said to be unclear, which is what led the Wettbewerbszentrale to file for an injunction against the advertising.

The Landgericht Konstanz held that the company was required to explain in more detail how climate neutrality was being achieved. The Court noted that environmental claims, e.g., that a product is “climate neutral”, can have a particularly emotional advertising appeal. At the same time, the interplay of complex scientific phenomena exists alongside a relatively low level of factual knowledge on the part of consumers. The conclusion of the LG Konstanz was that requirements in relation to the duty to inform must be strict and far-reaching.

A similar case saw the Landgericht (LG) Kiel – the Regional Court of Kiel – find an advertisement promoting “climate-neutral” trash bags to be anticompetitive (case ref.: 14 HKO 99/20), with the advertisement being deemed to be misleading to consumers. The Court stated that the imprint “climate neutral” above the name of the business gave the impression that the firm as a whole was climate neutral and not simply the product in question. Moreover, it was not clear that the phrase “climate neutral” only referred to certain trash bags. Indeed, the impression created was that other garbage bags provided by the company were also being produced in a climate-neutral manner. The Court therefore concluded that the advertisement was unfair and anticompetitive due to its misleading content, reasoning that it was important for consumers to receive unproblematic information about how climate neutrality is being achieved when considering whether or not to make a purchase. This necessary step could be realized, e.g., by including a reference to the website on the packaging or a QR code. The appeal is pending before the Schleswig-Holsteinisches Oberlandesgericht (OLG), the Higher Regional Court of Schleswig-Holstein (6 U 46/21).

Lawyers with experience in the field of antitrust and competition law can advise on how to avoid warning notices, injunction suits, and claims for damages.

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