CMA call on Environmental Sustainability and Competition and Consumer Law Regimes - Which? response

Summary

Which? welcomes the CMA’s initiative to look at how competition and consumer policy can better support the government’s net zero strategy and sustainability objectives. Which? research and other surveys have shown that most consumers in the UK recognise the urgent need to tackle climate change, but are looking for better support and more information to help them make the changes that are required.

To date the UK’s progress in reducing Green House Gas (GHG) emissions has been largely achieved through changes to electricity generation and has had a limited direct impact on individual consumers. However it is clear that the next phase is much more dependent on the buy-in and support of consumers, and will include significant change, and in some cases complex decisions, about products and services. It is therefore important that policy supports and motivates people in making the changes that are required.

The UK has a well developed competition and consumer protection framework and Which? welcomed the Government’s recent consultation that included proposals to address gaps in consumer law and make competition and consumer law enforcement more effective and efficient. In addition, in order to ensure the competition and consumer protection regimes better support the UK’s Net Zero and sustainability goals, we recommend the CMA either take the following actions themselves or advise the Government on necessary changes. Where it is relevant we have referenced regulations such as ecolabelling and eco design that are not the responsibility of the CMA. The CMA may have valuable input into the development of these regulations from a consumer perspective.

• Consider sustainability as a benefit for consumers. 

Refining the interpretation and application of existing competition law to treat product sustainability as a qualitative benefit for consumers would mean that the creation of more-sustainable products would represent an efficiency gain. This might mean that some behaviours that would previously have been considered an infringement of Chapter I of Competition Act 1998 might be exempted from prohibition, for example the sharing of information between firms to facilitate efficiencies that lead to more sustainable outcomes. Equally, sustainability gains should be considered in the assessment of a merger. However, where there are trade-offs between consumer and societal benefits then the Government rather than the CMA is best placed to make a decision on public interest grounds.

• Providing accessible and reliable information. Ensuring consumers have the information they need to make informed decisions about the purchase, use and disposal, or reuse, of products is critical to their ability to support the Government’s sustainability goals
  • Although not part of the consumer protection framework, consistent mandatory labeling, such as the UK energy label, provides consumers with accurate and comparable information. The CMA has a valuable role in supporting labelling schemes based on their knowledge and experience, including how labelling requirements should be presented online.
  • We have welcomed the CMA’s work to improve guidance on environmental claims made by companies, but we recommend additional clarity is provided by establishing in law how companies should use the terminology in claims and the level of evidence that will be required to substantiate the use of such claims.
  • The provision of environmental information can be further strengthened by making it an offence under the Consumer Protection from Unfair Trading Regulations to omit product sustainability information that is required under statutory programmes, or present that information in an unclear, unintelligible, ambiguous or untimely manner.

• Supporting the availability of more sustainable products. In addition to ensuring consumers have access to the right information about the environmental impact of products it is important that consumer law supports the availability of more sustainable products, including products that are more durable, repairable and with improved energy efficiency.
  • The Consumer Rights Act (CRA) should be amended so that ecodesign regulations which require certain products to meet energy efficiency and repairability standards are considered an aspect of satisfactory quality.
  • Consumers should be made more aware of their rights under the CRA and it should be easier to use these rights to get retailers and manufacturers to remedy faults.
  • Guarantees should reflect the expected lifetime of products, creating an incentive for producers to design more durable products.
  • Sections 40-43 of the CRA should be clarified to stipulate clearly that conformity with ‘satisfactory quality, fit for purpose and as described’ includes the provision of software and security updates that are essential for the functionality and security of smart products.

• Protection to navigate new markets. Consumer protection is important to give consumers the confidence to engage with the new markets, products and services that will help the UK meet net zero.
  • The CMA should review markets that are expanding rapidly in response to the Government’s net zero and environmental commitments and identify actions they can take, or they should advise the government to take, to address gaps or weaknesses in the consumer protection framework. This should include new markets where consumers are being asked to make costly and complex purchases such as the purchase of an electric vehicle or changes to how they heat their home, as well as expanding markets for consumers to rent, resell and reuse products.

• Tackling overconsumption. Business practices that cause consumers to make purchases they didn’t want or need and that result in waste, are neither good for the consumer nor the environment.
  • Misleading practices, or ‘dark patterns’, are often designed to trick consumers into purchases that they wouldn’t otherwise have made with the result that products and resources are wasted. This is bad for consumers and for the environment. The CMA should provide businesses with clarity as to which practices are unlawful and have the ability to stop abusive practices.
  • Offers create opportunities for consumers to save money however some offers can encourage consumers to purchase items they don’t want or need or later regret purchasing, which can lead to waste. The CMA should conduct a review to assess the impact of different offers on consumers and the environment.