Numerous businesses are using green and sustainability claims on their products, which are carefully examined by the Hungarian Competition Authority ("GVH"). In October 2022, the GVH announced the launch of an investigation against a company providing cup replacement and washing services. The GVH alleges that the company's green claims are unfounded, and the company cannot justify the validity of its green claims.
Green claims
As highlighted in our previous article, following the GVH's assessment on marketing and commercial practises related to 'green' and 'eco-friendly' claims, the GVH issued a set of guidelines with useful prompts, examples and explanations businesses should consider in order to comply with Hungarian law regarding green claims.
The GVH's green claims guideline (available in Hungarian) serves as a signpost on how the GVH assesses green, environmental and sustainability claims.
The promotion of sustainability
The GVH's proactivity in guiding market players and consumers on innovative solutions is also evident when it comes to sustainability.
The GVH emphasised the importance of sustainable product path in an accelerated sector inquiry report on the market of thermal insulation materials, and declared that an increased attention to the use of subsidies regarding solar energy and sustainable energy production is needed.
The GVH also participated in the joint investigation organised by the European Commission and the Consumer Protection Cooperation Network (CPC) regarding green claims made in websites. Additionally, in 2021, the GVH conducted the first research to assess the global interactions between sustainability and competition law. The research is based on a survey among ICN members and NGAs on their experience concerning the above topic.
The recent investigation
The GVH has launched an investigation examining the commercial practices and green claims of Cup Revolution, a company providing cup replacement services at concerts, festivals, sport events, bars. At these venues, consumers can only buy drinks in "returnable" plastic glasses for a fixed fee but upon returning these glasses – instead of a refund – consumers get tokens which may be used at another venue involving Cup Revolution.
Besides potential distortion of consumer choice due to exploiting a position of power, the GVH alleges that the company's advertising claims are potentially unfounded. The company claimed that "the use of returnable and washable cups can reduce waste production by up to 80% at events and catering". The GVH also argues that the company does not have sufficient evidence to justify the environmental benefits of the returnable cups, thus the green claims of the business may classify as unfair commercial practice by being misleading.
Summary
Businesses should be prepared for increased scrutiny on green and sustainability claims by the GVH and place great emphasis on competition and consumer law compliance, where the GVH's green claims guideline and external advisors' guidance will come in handy.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
