The Greenest/Most Environmentally Friendly "on Earth" or "Known to Man"
UK: Clearview Stoves Ltd. (ASA, April 11, 2012)
Often, claims of being the "something-est on earth" are treated as puffery. Not in the green context. Here, ASA investigated the claim on Clearview Stoves' website that its wood and fuel burning stoves are, "The greenest stoves on earth," amongst other claims regarding the stoves' specifications and fuel efficiency.
How Green Were They?
To support its "greenest" claim, Clearview submitted a number of measures it took to be "green". For example, it sourced local fuel, components and materials ("when possible") and returned all waste material for re-use. It was the first company, it maintained, to build a "clean burning" multi-fuel stove. It had provided recycling facilities for almost 30 years. It had its own nursery for future planting as well as its own sawmill. It had an efficient delivery system to ensure that its vehicles were dispatched fully loaded. Clearview submitted that its products were renowned for longevity and were often maintained by customers themselves, thus reducing the need for service calls. To top it off, Clearview heated much of its business premises with waste heat from production processes and had planted and maintained forests for 20 years, which produced environmental benefits.
That was all a definite wow! As impressive as the list was, however, Clearview fell into that dastardly pit of picking a claim so broad that it was virtually impossible to support, and ASA wasn't going to cut it any slack. ASA found "greenest stoves on earth" to require robust substantiation showing they were more environmentally friendly than any other stove on the global market, when the environmental impact of those products was assessed over their full lifecycle. Just not happening.
Green Claim Tip: Over-reaching is the mortal enemy of the great story you've worked hard to develop. Just like a balloon, pump it up that extra bit too much and it can all explode.
SOUTH AFRICA: Crammix (Advertising Standards Authority of South Africa, June 11, 2008)
A manufacturer of clay bricks in South Africa didn't fare much better with its superiority claim than Clearview had in the UK. (Okay, this is an older case but it seemed so à propos the issues being discussed these days.)
Here, the manufacturer, Crammix, said in a magazine ad that its clay bricks were, "one of the most environmentally friendly and energy efficient masonry materials known to man." The ad also contained a logo of a brick and a leaf, with the phrase "Environmentally Friendly" featured under the logo.
Based on Appendix J (Advertising Containing Environmental Claims) of the South African Code of Advertising Practice ("Schedule J")1 the Directorate of the Advertising Standards Authority of South Africa ("Directorate") found both the claim and the logo misleading.
Appendix J requires that claims such as "environmentally friendly" or "green" be qualified by a description of the environmental benefit. Crammix's claim was found in breach because it contained no explanations as to why clay brick was "environmentally friendly" and "energy efficient."
Similarly, Appendix J requires environmental signs or symbols to clearly indicate their source and not imply official approval. The logo in the Crammix ad did not indicate any source. Moreover, the logo appeared next to two other marks indicating approval by the South African Bureau of Standards. The Directorate concluded that "the hypothetical reasonable person" would think that Crammix's clay bricks had been approved by the latter Bureau or a similar accredited independent body. On this basis as well, then, Crammix's ad was found misleading.
Green Claim Tip: Using broad claims and self-created (but not so identified) seals of approval is like wearing a "Kick Me" sign on your back. Especially these days. See our article above on the FTC's newly updated Green Guides for more issues to consider when using certificates or seals of approval.
"Environmentally Friendly" Bio-Plastic Packaging
GERMANY: Danone Deutschland (Munich District Court, 2011)
Bioplastics is a burgeoning industry, with all manner of brands now being sold in plastic packages made at least in part from renewable crops instead of petroleum.
Green Tip: As with biofuels, bio-plastics may also become the focus of environmental groups. Caution is advised when making claims.
In the European Union, Danone Deutschland ("Danone") introduced a new tub for "Activia" brand yogurt that was made from corn and labeled, "New environmentally-friendly tub."
The new tub was said to use less raw material and to generate less CO2 emissions and less end-of-life waste. It even won the annual award given by Bioplastics Magazine.
This didn't impress the German environmental group called Deutsche Umwelthlife ("DUH "), however. It went to the Munich District Court and filed a complaint. Why? It felt Danone's "environmentally-friendly claim" was greenwashing. The new packaging was not recyclable and did not, in DUH's view, present a real environmental improvement over its polystyrene predecessor as the new packaging was made, in part, from genetically-modified corn.
Whilst Danone disagreed with DUH's position, the matter reportedly settled. Wishing to avoid further public debate, Danone agreed to remove "environmentally-friendly tub" from its container and websites and have the packages at issue off store shelves by December 27, 2011.
"The Ethical Choice"
NEW ZEALAND : Dole New Zealand (New Zealand Commerce Commission, June, 2012)
The New Zealand Commerce Commission sent a letter to Dole this summer relating to, among other things, whether the "Ethical Choice" stickers on its bananas and pineapples were misleading contrary to the Fair Trading Act.
Among the Commission's concerns, apparently, were that consumers may be misled into believing that an independent third party had verified the claim and that Dole's fruit is in fact "more ethical" than competitive fruit. On the latter point, the Commission apparently pointed out a number of allegations being made about Dole's ethical and environmental conduct, including its allegedly exposing Philippine banana plantation farmers to toxic chemicals (for which Dole was being sued) and alleged incidences of forced working hours, frequent accidents and concerns relating to pesticide use raised by Fair Food International. The letter also apparently raised issues relating to certain ISO standards and certifications referenced on Dole's website and expressed concern over "eco" and "eco-friendly" representations which were allegedly without whole-life cycle support.
Dole has reportedly told the Commission that it has fixed references to the standards the Commission referenced, and taken down potentially misleading point of sale materials (see http://bit.ly/NwsfPe ). Its website also explains how the "Ethical Choice" claim is Dole's own and not a third party certification. The Commission indicated in late October, 2012 that it had no plans to pursue further action against Dole.
Green Claim Tip: Regardless of the foundation (or lack thereof) of the Commission's concerns, this is another instance of an attempted positive "green marketing" initiative backfiring, at least initially, with an avalanche of negative publicity, including splashes across the Internet of alleged "ungreen" conduct by the advertiser. The more careful you are coming out of the gate, the less likely this will be to happen.
Organic Food: More Nutritious, Without Additives, Pesticides, Drugs, Environmental Damage and Better Tasting?
IRELAND : The Organic Supermarket – Blackrock (Advertising Standards Authority of Ireland, September 10, 2012)
In its internet advertising, the Organic Supermarket "shortened" and "summarized" some information about organic foods that it borrowed from the website of the authoritative Organic Trust. It discovered that shortening was not okay, however, when qualified statements were turned into categorical ones. While that isn't a new principle, the case is interesting as it hits a lot of controversial issues in the organic food versus conventional food debate – like:
i. "More vitamins, minerals and detoxifying antioxidants."
What the Organic Trust's website said was that, "Research continues to show that essential vitamins and minerals are higher in many organic foods. On average, organic food contains higher levels of vitamin C and essential minerals such as magnesium, iron and chromium as well as cancer fighting antioxidants." (emplasis ours)
You can guess what the Complaints Committee of the Advertising Standards Authority of Ireland ("Committee") found. The claim went too far, suggesting that all organic food had more of all vitamins, etc., than conventional food. An additional French study submitted by the advertiser also only showed that some organic foods had higher levels of some vitamins, etc.
Moving from the case to current headlines, the issue of whether organic food is more nutritious continues to generate debate – e.g., a recent meta-study from Stanford University hit the news on September 4, 2012, generating headlines that organic foods do not have a nutritional advantage – although the headlines, of course, overstate the conclusions of the study.
i. "No nasty additives: No colourings, flavourings, sweeteners".
This claim was found to be fine. The Committee agreed that additives are allowed, but as they are naturally occurring, the Committee didn't consider them "nasty." "Nasty" additives, which were banned by organic regulations, were those such as hydrogenated fats, aspartame, monosodium glutamate and all artificial colourings, flavourings and sweeteners.
ii. "No Pesticides. We don't like to spray our veggies."
Even though the advertiser said it meant that it "limited" pesticides and emphasized that it didn't "like" to spray its veggies, the claim was found misleading. A form of pesticide is in fact used in organic farming. Categorical is categorical.
iii. "No environmental damage. Drinking water free from pesticides & fertilizers."
The complainant said that organic food production would cause environmental damage such as GHG emissions from tractor use, destruction of natural habitat from farming and emissions from shipping organic food to retail. In response, the advertiser submitted a paper suggesting that organic is better for the environment. It was found, however – and not surprisingly - that "better" is not "no damage", so the paper provided no real support.
The Committee also pulled a proverbial smoking gun quotation out of the paper that, "While it is considered that the beneficial effects of organic farming outweigh the adverse, there is a clear need for further scientific research into the complex relationships between organic farming and the environment ...".
iv. "Delicious Organic food simply tastes better."
"Delicious organic food simply tastes better" was not treated as simply a subjective taste claim. The Committee said that since it was not qualified as the advertiser's opinion, it had to be substantiated. Which it wasn't.
v. "No Drugs. No antibiotics are used before, during or after" This was found misleading as antibiotics could be used to treat sick animals at the direction of vets.
Green Claim Tip: Punchy is good, but categorical can be fatal.
"Organic"–in Cosmetic Product Name
UK: Boots UK Ltd. (ASA, October 17, 2012)
Boots, a UK drug store chain, advertised a baby shampoo on its website, called "Little Me Organics Oh So Gentle Hair and Body Wash". The website stated, "Little Me Organics Oh So Gentle Hair and Body Wash has pear, mallow and organic aloe vera to clean and moisturize your baby's delicate hair and sensitive skin."
The complainant challenged whether "Organics" in the name was misleading because it implied that the product met an independent organic standard.
Boots submitted that "Little Me Organics Oh So Gentle Hair and Body Wash" was simply the product's brand name! Boots also argued that it was just electronically reproducing claims directly found on the product label. In its view, that was no different than in-store shelf displays showing the product. ASA wouldn't let Boots off the hook, however.
Green Claim Tip: Be aware that the approaches to issues aren't necessarily uniform across all jurisdictions.
On the first point, ASA acknowledged that the product did contain certified organic pear, mallow and aloe vera, which had been certified by four independent bodies. These organic ingredients made up less than 5% of the total ingredients. Even though there was no UK standard for organic cosmetics, ASA acknowledged that a number of independent certification bodies did exist and all defined a product as "organic" only if it contained a high proportion of organic ingredients.
Swayed by this, ASA found that consumers would understand "Little Me Organics" to mean that the product met an independent organic standard or used a high proportion of organic ingredients. Because neither the former nor latter were true in this case, ASA found "Organics" to be misleading.
Retailers Take Note!!!
On the second point, ASA was unmoved by the fact that Boots was simply reproducing the product's label claims. Presenting a bracing message for retailers who simply want to advertise on their website the products that they carry, ASA told Boots not to promote the product in future marketing communications unless it included a prominent statement disclaiming the implied "organic" claim.
"Natural" – in Cosmetic Product Name
South Africa : Reckitt Benckiser South Africa (Pty) Ltd., Dettol Natural Soothing Soap (ASASA, January 13, 2012)
Poor Boots! If only the UK ASA had as liberal a view about words used in product names as the Advertising Standards Authority of South Africa ("ASASA").
ASASA dealt with the "name" issue in relation to a Reckitt Benckiser South Africa (Pty) Ltd. product, "Dettol Natural Soothing Soap". The product label claimed, "New Dettol Natural Soothing Soap combines trusted Dettol protection with the natural goodness of calendula and chamomile to gently cleanse and hydrate your sensitive skin."
Reviewing prior ASASA decisions on use of the word "natural" in product names, ASASA held here (again) that the reasonable person would not understand the product to be completely natural based on the name of the product alone. In this case, the packaging contained no indications of natural ingredients, and the get up in no way implied natural ingredients. "Natural" was used only as part of the product name and in the claim that the product offers "the natural goodness of calendula and chamomile." The term was accordingly not found to be misleading and the advertiser was not required to show that the entire product was natural.
Green Claim Tip: Be aware that approaches to issues are not necessarily uniform across all jurisdictions.
"Naural" – for Processed Products
UK: Kerry Foods Ltd. (ASA, October 24, 2012)
ASA received a whopping 371 complaints about Kerry Foods' television advertisement for its Richmond ham product. Most of the complaints objected to the fact that the ad included a shot of a man's naked bottom, but four complainants challenged whether claims that the product was "made with 100% natural ingredients" and was "as nature intended" were misleading.
Kerry Foods acknowledged that the ham was a processed product and therefore the product itself was not natural. However, all of the ham's ingredients were "natural" in compliance with the UK Food Standard Agency (FSA)'s definition of the term "natural".
ASA accepted both "natural" claims, finding that the product was made with all "natural" ingredients in accordance with the UK FSA guidelines. ASA acknowledged that some complainants viewed the "as nature intended" claim as a misleading description of a processed product, but ASA concluded that most consumers would be aware that all mass-produced packaged ham was processed, so the claim was unlikely to mislead.
Note that the Canadian Food Inspection Agency ("CFIA") similarly distinguishes between "natural" claims and "made with natural ingredients" claims (see the CFIA Guide to Food Labelling and Advertising, Chapter 4). To claim that your food product is "natural", you'll have to meet much more stringent requirements about the product overall (e.g. the product can't contain any added vitamins, minerals, artificial flavouring agents or additives, and the product can't have any constituent or fraction thereof removed or significantly changed).
Green Claim Tip: A product that contains "natural ingredients" is not necessarily a "natural" product.
Oh, by the way, as for the naked bottom in the ad, ASA proved it had a sense of humour by giving a pass to the ad's "light-hearted" nudity.
US : Chipotle Mexican Grill (NAD, April/May, 2012)
"Naturally-raised" and similar claims have been hot buttons in many countries over the last while – both with regulators and consumers. Here, NAD decided – just on its own - to take a look into a video made by Chipotle Mexican Grill ("Chipotle").
The video was shown on Chipotle's website, Facebook, YouTube, in cinemas and later on TV. It depicted a farmer beginning with simple farming in a humane environment, going industrial and then more happily returning to simple farming, ultimately placing a crate into a Chipotle truck.
NAD felt the video suggested that all meat served at Chipotle restaurants was "naturally-raised." Which led them to ask – is it?
What does naturally-raised mean and did Chipotle meat comply?
NAD first noted that it didn't take a position on what constitutes sustainable farming or humane treatment. It wasn't a regulatory agency, nor was it the Federal Trade Commission – and even the latter didn't want to go there. The US Department of Agriculture ("USD A") had a definition of "naturally-raised", however, and as Chipotle's own standard was even more stringent, NAD did not make an issue of Chipotle's definition. (In a nutshell, Chipotle's standard restricted antibiotics and hormones, which the USDA also did, but also required humane treatment, which the USDA did not). To the extent that all meat sourced by Chipotle complied with its definition, NAD would be satisfied. Apparently the meat did and the NAD was.
The plight of the good guys
You have to sympathize with companies who have strong, good convictions, put their resources into doing things a better way and then get hit with a big challenge to their claims. They might think – with all the reams of bad actors out there, why on earth are resources and time spent coming after us? From the regulator/self-regulators' perspective, they want to ensure that claims about really helpful things (like "naturallyraised" meat and others) are protected and clean whenever they're used – to avoid them being rendered meaningless and ultimately ignored by consumers. As frustrating as it is to those trying to make a difference, the reality is that the good guys have to be as careful as anyone else – indeed, perhaps more so as they have so much invested, fundamentally, in their positioning.
Canada's stricter position
Just so you know, the Canadian Food Inspection Agency ("CFIA") has concerns about the term "naturally raised" being used on meat, poultry or fish here in Canada. In its Guidelines on this term, CFIA says it considers both "natural" or "naturally raised" to be appropriate only, "on products that were raised with minimal human intervention, for example, wild turkey or wild fish." It says that, "to raise animals so that their products can be labelled as 'natural' would be very difficult as most animals receive vaccination or medication and the feed given usually contains vitamins, minerals, additives, medication and direct fed microbials; none of which are considered to be minimal human interventions. ... "naturally raised" would be even more difficult, as raising a farm animal or fish is an expression of human intervention." As regulators often love precise, narrow claims and cringe at broader, less clear claims, CFIA would like marketers to use specific claims like "grain fed", "raised without the use of antibiotics" or, "raised without the use of hormones." Note that CFIA's guidelines were put out for public comment in 2011, and we're still waiting for any changes. For our prior, more fulsome article on this issue, see Heenan Blaikie's 2011 Green Marketing & Advertising Law Update.
Green Claim Tip: Good guys have to be as careful – or more so - than anyone, to stay on the side of the angels.
Electric Cars – Emission Numbers and Range Claims
General Motors UK Ltd. ("GM") found itself before ASA twice this year (it probably enjoyed the first time more than the second), on ads for the European version of the Chevy Volt – namely, the Vauxhall Ampera. The first Ampera ad dealt with mileage and emissions claims; the second with how far the car could go – a key point of competition for electric cars.
Ad #1: This said, "Under normal driving conditions where 80% of daily journeys are less than 30 miles, the combination of battery power and extended range technology deliver up to 175 miles per gallon of fuel whilst emitting less than 40 g/km of CO2." (emphasis is ours). The complainant wanted to see how GM supported both its mileage and carbon emissions claims. In particular, the complainant raised a question that piqued our interest in respect of the emissions claim. He submitted that the number given in the ad was misleading because it didn't take into account emissions created when the electricity from the grid was created that was used to power the car. Sounds farfetched but you never know how far this life cycle business will be taken nowadays. (See the BMW, Renault and Vectrix cases on page 21.)
What was the verdict? ASA found both claims to be adequately qualified and supported. The claims had been calculated in accordance with applicable regulations – where standards existed. On the emissions front, ASA accepted that it was very difficult to work back and quantify the emissions that had been created when the electricity itself was generated. There simply weren't any standards for that. ASA was satisfied that the amount stated (40 g/km of C02) was calculated in accordance with applicable regulations, such as they were, which measured the emissions of the vehicle in use.
On the 'good example' front, GM had placed both claims in context by specifying the type of driving conditions that would achieve the claimed results: "normal driving conditions, where 80% of daily journeys are less than 30 miles." GM also made it clear that it was a combination of battery power and extended range technology that achieved these results.
Ad #2: The Ampera didn't fare so well the second time around, when ASA felt the ad suggested – through the visuals and other elements in the ad - that its could drive up to 360 km without using a gas engine in any way.
The ad began by showing the car charging up at an electricity source, then driving away. Shots of athletes in training were cut in, with a super saying, "Comparison based on electric vehicles and extended-range electric vehicles driven electrically at all times, even when an additional power source is generating electricity."
Significant achievements of the athletes were shown, supplemented by a voice-over saying that, "Only true pioneers go further than others. Vauxhall Ampera, driving electricity further." To quantify what it meant by "going further", on-screen text said, "Ampera, up to 360-mile range."
So what was the background? The advertiser explained that the Ampera could go up to 50 miles on a fully charged battery, but then its "range extender" mode took over. That consisted of an internal combustion engine, fuelled by gas, which served as a generator for the electric motor. ASA found the ad misleading. The visuals and statements in the body of the ad, ASA found, focused on electricity, distance and longevity. The qualifier only came in a super, which ASA found difficult to understand and ambiguous as to what that the "additional power source" was. That was particularly so, according to ASA, given the average viewer's unfamiliarity with this new type of car and the fact that it used a gas engine to generate power for the extended trip.
The difference between the two ads? The first clearly revealed that the results stated (terrific gas mileage and emissions) were achieved by a combination of electric and "extended range" technologies. The second didn't refer to extended range technology right in the body of the ad. It only included that concept in a super, and one that ASA found to use somewhat mysterious language.
Green Claim Tip: When dealing with new or complicated technology, regulators and self-regulators will consider what they think consumers will likely understand (or not). You may thus have to work harder to ensure you explain material elements clearly.
Vehicles - "Low Emissions" and "Zero Emissions" Claims
UK: FirstGroup plc t/a First Bus (ASA, January 25, 2012)
First Bus ran a TV ad showing a bus with a poster on its rear end saying, "We love low emissions." At the same time the poster appeared in the commercial, on-screen text was added saying, "Our buses produce 4.97% less carbon than conventional diesel buses." While this may not sound too exciting, the back story here resulted in some pretty interesting questions.
What are "Low Emissions?" First, was it okay to suggest that a bus that produced only 4.97% less carbon had "low emissions?" Isn't 4.97% a pretty small amount? Although ...they were pretty open in disclosing what they thought were "low" emissions, so did that make it okay? The added twist here was that the Department for Transport ("DfT") had an internal standard for "low emission" buses, requiring them to produce 30% less carbon than conventional buses. Why did the DfT have such a standard? It was used for its own emission target purposes. Not exactly an advertising regulation, like those requiring "low fat" foods to have no more than x% fat. So - should First Bus have been effectively bound by that internal standard or free to provide and explain its own meaning of low emissions? And would members of the public really know about the DfT's internal standard anyway?
ASA apparently had no trouble deciding the case. It was quite happy accepting that the public would be aware of the DfT's 30% standard - even more so, ASA felt, given that DfT had just announced that it would be putting 542 new low emission buses on the road, which would produce 30% less CO2 than conventional buses. (ASA clearly gives the British public high marks for being aware of internal government policy and paying careful attention to announcements of this nature.) In these circumstances, ASA felt, it wasn't okay for First Bus to set up its own definition for low emissions.
Green Claim Tip: You never know for sure how a regulator is going to reason its way through an issue. Your best plan then? Be careful enough in framing your ad that you won't end up in front of one.
UK: Nissan Motor (GB) Ltd (ASA, February 22, 2012)
Following other electric car advertisers that came before it, in February it was Nissan's turn to be scrutinized for claiming that its LEAF electric car was emission-free. While driving it did not produce emissions, as with any electric car, the process of generating the electricity used to power the vehicle did.
What did the advertising say? The focus here was Nissan's website for the LEAF. It had a vertical hyperlink that said, "Zero emission by Nissan". The website also gave an option for consumers to, "Download e-brochure". On the last page of the brochure, in the 'Specifications' section, a statement appeared saying, "The new air. No tailpipe, no emissions. The all-electric Nissan LEAF doesn't produce one gram of CO2 whilst driving" (emphasis added).
The result: ASA concluded that the advertising, taken as a whole, did not mislead. ASA considered that consumers would be likely to download and view the brochure, which specified that no emissions were produced "whilst driving." Based on that assumption, ASA felt consumers would understand the claim to refer to the vehicle while in use, not while being charged.
But be careful: Although ASA approved Nissan's "zero emission" claim in this context, it hasn't always been as cooperative. Consider the following three previous adjudications in which ASA held that similar "no emissions" claims could only be used if no emissions were created during the car's whole life cycle: manufacture, use (including charging) and disposal.
BMW (UK) Ltd. (ASA, July 28, 2010): As we summarized in our October 2010 Green Marketing and Advertising Law Update, BMW's ad included the following statements:
- "100% JOY. 0% EMISSIONS"
- "The BMW Concept ActiveE is the first BMW to be powered purely by electricity... Thanks to its electrifying performance and zero CO2 emissions when driving, the ActiveE redefines BMW EfficientDynamics" (emphasis added).
Like Nissan's ad, BMW's zero-emissions claim included a qualifier: "when driving." In fact, BMW's qualifier was arguably more closely connected to the claim, being right in the body copy of the print ad, than was the case with Nissan's hyperlinked explanation coming in a product e-brochure. But unlike with Nissan, ASA found BMW's earlier claim misleading. ASA stated that the inclusion of "when driving" didn't clarify but instead contradicted the zero-emission claim.
Renault UK Ltd. (ASA, March 31, 2010): Renault claimed that it was launching a range of "zero emission" vehicles. Here, it didn't include a qualifier at all – and further, it contained a statement that suggested Renault WAS talking about the whole life cycle – that being, "For us, global warming goes beyond the emissions coming out of the exhaust. It's an issue we address before, during and after manufacture." ASA found the claim misleading because the vehicles were likely to be charged with electricity from the national grid (powered mainly by non-renewable sources), which would create emissions.
Vectrix (UK) Ltd. (ASA, May 7, 2008): Vectrix advertised its petrol scooter as "zero emissions". Like Renault, Vectrix didn't qualify its claim. ASA stated that "without immediate qualification to explain that it referred to emissions produced by the vehicle while it was being driven" (emphasis added), the claim was misleading, because the scooter would emit CO2 emissions while charging.
Fuel Saving And Emission Reduction Claims
UK: Sonic Reflex, trading as Waterboost System (ASA, January 4, 2012)
This case represents a typical performance claim case, where the ad asserts many wondrous results but the support consists of just a one-off test or is conducted with poor methodology, sometimes presenting theory as fact without any real-world testing.
The flag for both legal counsel and consumers is to not be overly impressed with detailed and extremely scientific-sounding claims as to how the product works and the results that are achieved. Here, Waterboost claimed that:
"The Waterboost System uses spare electricity from your cars [sic] alternator to generate Hydrogen and Oxygen gas from water. The Hydrogen and Oxygen is fed into the manifold of your vehicle ..."; "The enhanced air/fuel/hydrogen mix burns up to 10 times faster however this rapid burn is so fast that the resulting power stroke and exhaust stroke will be much cooler, resulting in significantly less nitrous oxides (NOx)";
"...In brief, noxious gas is almost eliminated and greenhouse gas is decreased in proportion to the reduction in fuel consumption ..."; and the device increased the miles per gallon (MPG) achieved by a Ford KA from "38 - 43mpg" to "72 - 80mpg".
While there were evident shortcomings in its support – e.g., it admitted that the results were based on its own research and did not guarantee similar results for everyone - Waterboost had another defence: others were making claims just like this for inferior products! One can commiserate. But none of this went very far with ASA and the ad had to be withdrawn.
Green Claim Tip: Courts aren't much more inclined to accept the "but everyone else is doing it" defence than you are with your kids (or your parents were with you).
Energy/Money Savings Claims – "Up to "
US : Gorell Enterprises, Inc.; Long Fence & Home, LL P; Serious Energy, Inc.; THV Holdings LL C; and Winchester Industries (FTC, Press release February 22, 2012)
As winter closes in, whose thoughts aren't turning to mittens, ice skates and heating bills? That means that energy and money savings claims are about to proliferate, and the FTC has launched a warning shot across all our bows as to how they should be supported.
The five companies list above advertised, variously, that their replacement windows would save between 35% and 55%, that heating and cooling costs would be cut "up to __%" or that they would be cut "right in half". Each company offered a variation of an "energy savings pledge" or "guarantee" to pay consumers the difference if the savings claims didn't pan out.
The FTC pursued the companies, alleging that they didn't have a reasonable basis for their claims and ultimately settled with them all in February. What has had everyone buzzing was the FTC's requirement that where claims represent savings of "up to ___%" there should be competent and reliable scientific evidence to substantiate that consumers are likely to achieve the maximum results promised under normal circumstances – or, in other words, that " all or almost all consumers" are likely to achieve the maximum savings claimed.
The FTC's stringent "all or almost all" requirement arose out of a study it commissioned in connection with the investigations. The FTC's study revealed, essentially, that many consumers don't really register the "up to" part of a claim. In the test ad, stating that the windows were, "PROVEN TO SAVE UP TO 47% ON YOUR HEATING AND COOLING BILLS", between about a third and a half of the respondents (36% - 45.6%) read the ad to say that they would save 47% (not "up to 47%", which was also an option) on their heating and cooling bills. That was the same proportion (statistically) as gave that answer on seeing the same ad but without the words "up to." On a closed question, 28% said that all or almost all of the window users could expect to save about 47% – which was apparently enough to lead to the FTC's "all or almost all" position. Another 20% thought it mean that about half or most would save that much.
And just in case companies weren't listening during the first wave of enforcement ...
On August 28, 2012, the FTC put out a release indicating that it had issued warning letters against 14 more replacement window marketers making claims similar to those made by the five earlier companies.
Green Claim Tip: Copy testing can be full of surprises. As in other cases, it's best to be specific and define your own claims rather than having an adjudicator do it for you. You may be able to say "up to" if you want, but the prudence of doing so and the additional information you may need will depend on how your results are disbursed and the context of the claim.
Energy Efficiency and Savings Claims – Kitchen Hot Water Dispenser
UK: Quooker UK Ltd. (ASA, January 4, 2012)
This case involved a kitchen instant hot water dispenser. If you aren't familiar with this device, it is God's gift to tea lovers – allowing one to simply pull a lever or turn a knob and pour perfectly heated water right into one's mug. For those who feel guilty that the water is continuously heated and on standby, claims such as Quooker's would be of intense appeal: "Eco-Friendly: Delivers exactly the amount of water you need, when you need it"; "Energy Efficient: Energy use only 3p a day, a saving of up to 55% against a kettle."
Was this too good to be true? Most sadly, yes (at least in this case). "Eco-Friendly" and "Energy Efficient": Quooker proffered a number of points to support these claims. It explained that its product had standby consumption of just 10W, it had patented tank technology that resulted in less heat loss than other hot water storage products and it was more recyclable than competitive dispensers. That sounded pretty good, although it didn't get Quooker too far as it only spoke to other instant hot water dispensers and not other types of water heaters, like kettles, for example.
Quooker also relied on two reports to support its energy efficiency claim: i) an independent Energy Analysis Report ("EAR"), assessing the efficiency of various water boiling methods; and ii) a 2006 Report on kettle trends and energy consumption. Right off the bat, the latter report was discounted as it had numerous methodological problems, including the fact that it was from 2006 and models had changed since then. That report would fall into the "throw everything in but the kitchen sink" approach to evidence submission, which is not generally recommended.
The EAR did show that Quooker used less energy than the other products when boiling water. Quooker's undoing here was that its product embodied more energy than a conventional electric kettle on a total life-cycle basis – Quooker water filters had to be replaced every three years or so. As for the "energy efficient" claim, the EAR concluded that Quooker's energy efficiency was equivalent to its electric alternatives, but the claim, "Energy use only 3p a day, a saving of up to 55% against a kettle", implied that the Quooker was more energy efficient than a kettle.
With respect to the specific savings represented – "...only 3p a day, a saving of up to 55% against a kettle" – Quooker had based this calculation on a typical kettle use of eight times a day, for which it had no specific support. In fact, there was a report that pegged typical kettle use at only 4.22 times per day, which would throw Quooker's numbers substantially off. Quooker accordingly agreed to withdraw that claim.
Green Claim Tips: While the following points may seem self-evident, it is surprising just how often they are ignored. First, if you make an eco-friendly claim against a broad range of competitors, your ecofriendliness has to be supported against them all – not just some of them. Second, life cycle is extremely important – and don't forget to include all essential parts of your system when conducting the analysis. Third, make sure your test methodology doesn't have holes in it. Testing against current competitors as opposed to outdated models is generally recommended. (Read with sarcasm)
LED Bulb – Brightness Claims
UK: Burton & Sons Trading Ltd. t/a SimplyLED (ASA, October 31, 2012) SimplyLED's ad claimed that its LED lightbulbs were "brighter than a 50W Halogen". In support of the claim, SimplyLED provided a comparative photometric test report conducted by an independent testing house. The report compared SimplyLED's LED lightbulb with 50W halogen lightbulbs from four different brands – GE, Sunbeam, Hyundai and Homebase.
ASA held that the brightness of lightbulbs is best compared in lumens. The report provided by SimplyLED indicated that in a stabilized state, SimplyLED's bulb had a lumen reading of 411.1, which was higher than the readings of Sunbeam (389.8), Hyundai (352.8) and Homebase (275.3), but failed to beat that of GE (451.5).
SimplyLED protested that ASA should also consider other factors such as beam angle and colour temperature, for which its product beat GE's. ASA held, however, that these factors did not relate to the brightness claim and that SimplyLED had failed to provide sufficient evidence to suggest otherwise.
Green Claim Tip: Make sure you're relying on the right measures to back up your claims. According to the UK, ASA a brighter bulb = a higher lumens reading, unless you have robust proof that other measures are also relevant.
UK: Shell International Ltd. (ASA, December 14, 2011)
Shell fared well here with an ad that promoted its involvement in biofuels. This one claimed that, "This renewable energy is one of the most effective ways of reducing CO2 from cars and trucks today." The challenger, ActionAid UK, believed that biofuels did not reduce CO2 emissions from vehicles when the full life cycle of the fuel was taken into account.
In this relatively complicated decision, the discussion inevitably examined the various part of a biofuel's life cycle, including direct and indirect land use change factors, with a review of the data that underlay Shell's position. This included data from sources in the EU, UK, US EPA and California Air Resources Board to support Shell's position that life cycle had been appropriately considered.
Uh Oh – How to Measure the CO2 Effect of Indirect Land Use Change?
Much of the discussion centred around the trickiest part of the life cycle, which was indirect land use change ("iLU C"). What's that about? The thing is that before lands were planted with the crops to be used to make biofuel, the lands would have been occupied by forests or peatlands, which would have been absorbing CO2. When those forests, etc. were cut down to plant the biofuel crops, all the CO2 they stored would have been released. So right there, you would be starting with a big CO2 bill on your life cycle tab. But how do you calculate that?
What ASA Said it Needed
As ASA acknowledged, iLUC data wasn't always available for all biofuels. It wasn't prepared, however, to say, "Well, let's just forget about it then." What ASA said was that to make a CO2 savings claim for a biofuel, you should have taken reasonable steps to show either that the previous land use had been taken into account or that the biofuels had been sustainably sourced – e.g., in compliance with criteria under the EU Renewable Energy Directive, which are designed to protect against the destruction of dense CO2-holding areas like forests and peatlands.
Shell apparently satisfied ASA on those counts. ASA found that the majority of specific biofuels Shell distributed (90.31% in 2010) were accounted for within data published by the California Air Resources Board and EPA (which included iLUC and dLUC). It found that the remaining biofuels had been sustainably sourced in line with the EU Renewable Energy Directive and also met, or exceeded, the non-mandatory targets on GHG savings set by the UK Renewable Fuel Transport Obligation.
Ultimately, then, and after they all probably had a big headache, Shell convinced ASA that the claim was sufficiently well-founded.
Note that ExxonMobil hadn't done so well when its biofuel was adjudicated by ASA nine months earlier (March 2011). As covered in our last Green Marketing & Advertising Law Update, ExxonMobil's TV ad claimed that algae biofuel could help "solve the greenhouse gas problem." ASA found the ad as a whole to overstate the technology's total environmental impact.
Green Claim Tip: Biofuel claims can still be contentious, so proceed with particular caution. If you are interested, see this article about a recent study done in Switzerland taking a look at the eco-balance of various biofuels versus petroleum. http://bit.ly/R2DaSd . You can also check out the TLC article (The Learning Centre) in this Update on, "Biofuels Heating Up: Are They Greener?"
UK: The Banks Group Ltd, trading as Banks Renewables (ASA, June 20, 2012) and Energiekontor UK Ltd., (ASA, May 30, 2012).
How to Make Claims About Wind Farm Power
Generally speaking, wind developers have been beating back challenges pretty well in the UK, although the steady stream of cases is probably helping to keep them careful and honest. In two recent and robust challenges, Banks Renewables ("Banks") successfully met all six points of complaint, while EnergieKontor won on four out of five.
What sorts of wind issues were put under the microscope? They will probably be more riveting for you if you are, or are counsel to, players in the wind arena. They ranged, however, from allegedly inaccurate decibel comparisons, to allegedly deceptive photos of the height of the proposed turbines, to the effect the development would have on habitats and species in the areas or, in EnergieKontor, how much CO2 would be saved each year. For some general learning, we focus below on how ASA treated the claims of: a) energy output; b) how many households that energy would serve; and c) the "energy payback period."
i. Energy Output
This was the claim in Banks: "The Windy Bank Wind Farm will provide, on average, enough electricity to meet the domestic needs of around 7,400 households. This represents approximately 70% of households within the Teesdale district."
(emphasis added, partly to show you all the qualifications they cushioned in)
This was the claim in EnergieKontor: "The electricity generated as a result of the project will, on average, be enough to power 3,670 Craven District households.*"
Aren't those claims similar! In Banks, however, both the claim and the support were found acceptable, while in EnergieKontor they were not. The difference? Rather than relying strictly on theoretical numbers, Banks used on-site wind speed data collected during a 12-month period from a height of 60m above ground level. It then also took into account the energy that would be lost due to scheduled maintenance and turbulence.
By contrast, EnergieKontor used an average capacity factor taken from the Department for Energy and Climate Change ("DE CC") website without any onsite data. That was not fatal in itself, as ASA has accepted average capacity factors before. ASA said, however, that, "...if marketers were basing claims on estimated figures and not historical or site-specific data, this must be made clear to consumers."
EnergieKonter's statement that the project "will" generate the cited amount of electricity, as opposed to using more conditional language, was found to be misleading. Further, the footnote used in one of the ads to disclose that an average capacity factor had been used was found insufficiently clear or prominent to qualify (and indeed was considered contradictory to) the claim in the body copy.
A similar result, indicating that a definite claim was reached in the very recent ASA case of Druim Ba Sustainable Energy Ltd., reported on October 31, 2012. The claim there, "The total installed capacity will be up to 69 MW producing enough clean energy to supply over 38,000 homes" was found misleading as it was definitive "will be" but was not based on site-specific data.
ii. Households Served
Both Banks and EnergieKontor used the most recent government statistics for average UK household electricity consumption and number of households in the pertinent regions (Teesdale and Craven respectively). Banks had rounded the number of households served down to be more conservative – never a bad idea and an approach recommended by RenewableUK, formerly the British Wind Energy Association.
Note that EnergieKontor thought it was actually being more conservative than it needed to, by not following the "standard industry practice" of using a standard figure for the number of homes powered per 1 MW of installed capacity. Instead, it used the more recent, and more conservative, government statistics for energy consumption and number of households. That was all well and good. It just didn't help much, given that EnergieKontor forgot to also say that energy output was "estimated" or "potential."
iii. Payback Period
Banks' Claim: "In approximately 7-8 months (depending on wind resource and other factors) a wind farm will pay back the energy used to construct it....". (emphasis added)
In support, Banks offered up: a) two brochures from a wind turbine manufacturer, putting the energy payback time for a 2 MW onshore turbine at 7.7 months and for a 3 MW at 6.6 months; b) the life cycle assessment ("LCA") reports underpinning those figures (using ISO 14044); and c) an additional LCA report for an onshore wind farm in Denmark with eight 2 MW turbines, based on methodology reviewed by an external consultancy (though not using ISO 14044). The latter LCA also showed energy payback at 7.7 months.
As Banks was going to use turbines ranging from 2 MW to 3 MW, it rounded the figure to "7-8 months" for the claim. It also threw in the qualification – in the big print - that energy payback was dependent on wind resource and other factors. To boot, Banks reduced the reach of its representation, claiming a 7 to 8-month energy payback for energy used in "constructing the turbine", when the LCAs had calculated that payback for energy used in the total life cycle of the turbine – not just the construction phase. Again, ASA smiled on this as conservative and understated.
UK: Livos Energy Ltd. (ASA, October 10, 2012)
ASA gave the nod of approval to both of the following claims that wind farm developer Livos included on its website:
- "a well-designed modern wind turbine is remarkably quiet in operation" And
- "the vast majority (93-99%) of those who had seen a wind farm suggested that the experience would not have any effect on their intentions to return to an area."
The first claim, about being remarkably quiet, was supported by further information on the website about planning regulations to limit noise levels as well as data from peer-reviewed academic research and publicly referenced studies that other reputable organizations had also referenced.
The second claim, about visitor intentions, was derived from a report by the Scottish Government. Given that the claim was "clearly referenced and accurately reported", ASA found the claim unlikely to mislead.
Green Claim Tip: It's just like those history papers you had to write for school. Identify the source of your claim. Ensure that sources are reputable.
UK: British Wind (ASA, September 19, 2012)
Advertisers love scary claims that make their products look indispensible. Cases do proffer a rough equation, however. The scarier and more sensational the claim, the better your backup better be.
The advertiser here, British Wind, is an informal consortium of eight major renewable energy companies. In case you thought that the fossil fuel folks got all the negative media coverage, wind gets its share too. Because of that, British Wind launched a campaign to counter the bad PR and stimulate discussion about wind's role in the UK energy mix. Targeting natural gas, the ads sought to show that wind will be significantly cheaper and will lessen the UK's reliance on foreign suppliers of gas. Its ads included the following claims (in addition to others that were also adjudicated but not covered here):
i. "Gas prices have trebled in the last decade and have driven up electricity bills"
ii. "70% of gas will be imported by 2020"
iii. "Wind ... can keep bills down in the face of rising gas prices"
Guess which claim was upheld and which two weren't. Here's a hint: Talking about what will be in the future, as the second and third claims do, is hard at the best of times – never mind in this complex area.
i. Found OK – Claim based on the past: "Gas prices have trebled in the last decade and have driven up electricity bills".
It was interesting here that British Wind meant to say that consumer gas prices had trebled and it happily presented support for that. ASA, however, read the claim to represent that wholesale prices had trebled because of the reference to electricity bills, since consumer gas prices wouldn't 'drive up' electricity bills. Fortunately, British Wind was able to substantiate that wholesale prices had trebled as well. Yet another reminder that it is good to have someone independent look at your ads to make sure others don't read them differently than you do.
ii. Found Misleading: "70% of gas will be imported by 2020".
ASA found this claim to exaggerate both the certainty of the 70% number AND the appropriateness of the number itself.
To support the claim, British Wind put forward data published by an international electricity and gas company. (Evidence from the gas folks themselves!) The data did suggest that the proportion of imported natural gas would continue to increase and estimated that imports could be either 69% or 73%, based on two different scenarios. Here came another smoking gun, however. The report itself explicitly said that it was looking at scenarios, not forecasts, and that unforeseen events like recessions or new government initiatives made it very difficult to forecast a number of years into the future. Circumstances might also occur that would DECREASE the amount of gas being imported. These qualifications contrasted strongly with the categorical claims that appeared in the ads at issue.
iii. Found Misleading: "Wind ... can keep bills down in the face of rising gas prices"
ASA's finding on this claim illustrates how complicated price-related claims can get – particularly when: i) they compare prices to another form of energy; ii) they talk about what prices will be in the future; and iii) the supporting studies refer to experience in other countries.
Unfortunately for British Wind, ASA dismissed the consortium's evidence based on wind energy pricing in Ireland and other European countries. The studies didn't examine the UK market, which was different in a number of respects, including the mix of electricity sources and subsidy levels and models. As well, the studies looked at the impact of wind energy on wholesale electricity prices elsewhere. Did that necessarily translate into what would happen with consumer prices, which the ad was addressing? ASA pointed out that consumer prices were set in a competitive open market, which meant there was no guarantee – even if there were a reduction in wholesale prices – that higher wholesale prices would be passed on to consumers. That was an important kicker.
Further, although British Wind showed how rising wholesale gas prices could surpass wind costs, these calculations were rejected as irrelevant as they weren't based on costs for consumers – they were based on returns to those who generate electricity. There's that distinction – and those troublesome assumptions – again.
In addition, the evidence did not adequately figure in subsidies. ASA acknowledged that British Wind's evidence demonstrated that rising gas prices could make wind power more competitive, but said the evidence didn't prove that wind energy can "keep bills down."
Green Claim Tips: #1: If talking about the future, avoid four-letter words like "will". Try three-letter words like "may" or five-letter words like "could." In other words, qualify your claims as estimates or projections and indicate what they're based on. #2: If your evidence is based on what will affect wholesale costs, are you sure consumer prices will respond concomitantly in your jurisdiction? They may be subject to a slew of their own factors and may not rise or fall with wholesale prices. #3: Trite but important general principle: Confident claims sound great but they can be ad killers if qualifications are necessary.
UK: Sunsolar (ASA, August 8, 2012)
"EARN UP TO £1,500 A YEAR TAX FREE, AND FEEL GOOD ABOUT THE DIFFERENCE YOU'LL BE MAKING TO THE ENVIRONMENT AS WELL AS YOUR BANK BALANCE."
Sunsolar's claim was definitely attention-grabbing! Unfortunately, ASA ultimately found its promise of big bucks misleading.
By way of background, the UK, like Ontario and some other jurisdictions, has a system whereby if you install solar panels, the government will pay YOU for the electricity you generate through those panels and put onto the grid. It's called a Feed-in-Tariff ("FIT") system and it can earn home owners some real money (although it's dropping, but let's not go there).
What was the problem here? To make a claim about achievable earnings, you obviously need to know how much electricity the system will typically generate. Here, the calculations underlying Sunsolar's ad were based on a 4 kW retrofit system. Sunsolar happily came forward with details showing that the 4 kW retrofit scheme generated 3434 kWh based on a "perfect install" with the "maximum Photovoltaic system." What it didn't have, and what it needed, was evidence (including from existing customers who had used their 4 kW systems) to show that their systems typically generated 3434 KwH per year. ASA also wasn't satisfied that the savings numbers worked out as represented even if 3434 kWh per annum could be regularly achieved.
But there was more. The ad, published in April, hadn't mentioned the relatively important fact that the price the government would pay for electricity was going down from 21p to 16p for newer systems – i.e. with an eligibility date on or after August 1, 2012. That would obviously lower the amount of attainable earnings. ASA concluded that the ad was also misleading in not disclosing that material information.
Green Claim Tip: We know you've heard it before... Your substantiation has to be tight and based on appropriate testing and experience. Relevant zingers – like facts that will soon fundamentally change the numbers in your story – also need to be disclosed.
UK: Green Sun Ltd. (ASA, February 22, 2012)
Oh look – another "up to" case.
Here, Green Sun's press ad included a number of claims, many clearly unsubstantiated. We draw your attention to the following claim, which ASA found misleading: "BEAT SPIRALLIN G ENE RGY PRICES , SAVE UP TO 50% ON YOUR ENE RGY BILLS ... "and "Earn up to £36,000 tax-free from the F.I.T. and export tariff scheme".
What proportion of consumers had to be able to reach the maximum £36,000 earnings, when it was qualified by "up to"? All or almost all of them? 10% of them? ASA held that readers would expect – and so would ASA – that the average householder could achieve the maximum claimed. Because Green Sun did not have evidence to support that, the claim failed.
As for "up to" in the savings claim ("save up to 50% on your energy bills"), ASA didn't really focus on that as Green Sun said it was included by mistake and wouldn't be repeated.
UK: A Shade Greener Ltd. (ASA, April 11, 2012)
Here's an example of a money/energy savings claim done right. A Shade Greener's website for its solar panel system stated:
"We recently surveyed 100 of our customers who'd had our systems for over 1 year. The average reduction in their annual electric bill was 37%, with 25% of those questioned enjoying savings of 50% and over." ASA found that the "37% average savings" claim was adequately substantiated.
A Shade Greener provided data about customer savings that, in most cases, was drawn directly from the clients' electricity bills. In a small number of cases, the data was sourced from figures quoted by the customers. ASA noted that the best evidence would be taken directly from the clients' bills, which was the case in most instances.
ASA also noted that the reductions were mostly evenly distributed, with few outliers; given the relative lack of deviations, ASA concluded that the "average" claim was statistically sound.
The client survey data provided by A Shade Greener also revealed that most of their clients agreed that since having the solar panel system installed, they had tried to limit their energy consumption. Under the savings claim, the website stated: "If you manage your electricity wisely... you will notice a big difference, as have all our customers". In ASA's view, this made it sufficiently clear that the clients' savings resulted not only from the mere installation of solar panels but also the clients' deliberate intention to manage their electricity wisely.
Green Claim Tip: This ad demonstrated the combo "safe and impactful" approach – i.e., stating an average savings and then punching it up with the percentage who saved way more. The appropriate claim for you may depend on how your results are disbursed, so look at that first and then decide how to frame your best claim.
Claims Relating to New Carbon Price
On July 1, 2012, Australia dove in where the federal governments of Canada and the US have feared to tread (so far), kicking off a mechanism to fix prices on greenhouse gas ("GHG") emissions. Anticipating that some advertisers might want to take advantage of the move to scare consumers into buying their lower-carbon products or to blame all price increases on the carbon scheme, the ad regulator jumped in to say, "Don't Even Think About it!" It created new guidelines for carbon price claims and went after non-compliers without delay.
What' s the Carbon Price About?
In a nutshell, the mechanism sets an amount that Australia's larger GHG spewers (e.g., those generating electricity, supplying natural gas, operating landfills, etc.) have to pay for each tonne of CO2 equivalent they emit.
Higher Prices, Right Down to Consumer Products
The new carbon mechanism means that because covered emitters will have to pay for their emissions, many may charge more for their carbonspewing products – e.g., electricity, natural gas, etc. In turn, manufacturers, distributors, retailers and other businesses paying those higher prices will likely pass the extra costs onto consumers. If the policy works as intended, consumers will ultimately buy fewer high carbon products, businesses will try to reduce their own electricity, natural gas, etc., so they can lower their costs and grab more business with lower prices, big emitters will introduce new technology to lower their emissions and the amount they pay, and GHG will go down.
So Where Does Advertising Come In?
Not having been born yesterday, the Australian Competition and Consumer Commission ("ACCC") anticipated some dicey price claims that might roll out based on this scenario. Like what? Like businesses not really knowing how much of their price increases flowed from the carbon price specifically (there could be other factors) but nonetheless claiming that the whole increase they are passing on is due to the carbon price. Wouldn't that make the government even less popular than it already is for instituting the scheme! And what about those suppliers of lower carbon products – like solar panels, for example. Might they not have a hayday exaggerating the impact the carbon price will have (e.g., how high electricity prices will go up), making lower carbon alternatives look that much better.
So the ACCC pointed its warning finger at advertisers and brought in "Carbon Price Claims – Guide for Business" to head off these practices. Originally introduced on November 15, 2011, the Guide has already been updated (May 2012).
First Two Cases out of the Gate
Our friend Peter LeGuay, advertising law counsel in Sydney, was kind enough to alert us that the ACCC quickly landed its first transgressors. Polaris Solar and ACT Renewable Energy Solar, both solar panel suppliers, sent out leaflets to households claiming that electricity prices would increase by 20% due to the introduction of the carbon price alone, and that if this continued, electricity prices would increase by over 400% by 2019. Those were very impactful numbers – and what wonderful reasons to buy solar panels! Unfortunately, the numbers were simply based on unverified claims in a newspaper ad as opposed to the detailed, documented evidence the ACCC – and the Guide – wanted to see. Both suppliers entered into informal undertakings with the ACCC, as reported on July 5, 2012. ACCC warned that it would be investigating any alleged misleading claims about the impact of the carbon price that came to its attention. Which it did. If you have the e-version of this Update, see ACCC's report about its first 100 days here.
1 As of October 2012, it is now schedule G.
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.