Consumer protection authorities around the world are stepping up their enforcement activities, with some wielding new powers to penalise infractions. "Greenwashing" – making false, exaggerated or misleading claims about the environmental benefits of a product or service – now features firmly among supervisory concerns. "Bluewashing" – where a company overstates or falsely claims its commitment to ethical issues such as social responsibility and human rights – could soon join it. Businesses in the consumer goods and retail sectors also need to be aware of the increased risk of class actions across multiple jurisdictions, whether under the EU's incoming product liability regime or from shareholders in so-called "stock drop" claims. The Law Commission in the UK is also considering the introduction of a consumer class action regime.
In this briefing, we examine the key developments across Australia, the UK, the EU and the US.
Key takeaways:
- Enforcement authorities in the UK and Australia have gained stronger powers to enforce consumer protection law, including significant fines on companies in breach – while the EU has renewed its focus on enforcement and is instituting a new product liability regime.
- Meanwhile, in the US, state-level consumer protection has become more active, notably on the issue of algorithmic pricing.
- "Greenwashing" is becoming a major concern for consumer protection enforcement authorities as well as a source of collective claims.
- Businesses also need to be aware of potential exposure to "bluewashing" and "stock drop" exposures when a share price falls after hidden or misleading information comes to light.
