State Attorneys General Challenge Recycling Initiatives Over Antitrust And Consumer Protection Concerns

At the end of October, the attorneys general of five states—Florida, Texas, Iowa, Nebraska and Montana—issued letters to three pro-recycling organizations raising concerns that the groups' recycling initiatives may violate state and federal antitrust and consumer protection laws. These three organizations—the Consumer Goods Forum, the Green Blue Institute, and the U.S. Plastics Pact—have worked to align major corporations on recyclability guidelines and product designs that support sustainability, including efforts to define what is "recyclable." The state attorneys general argue that these efforts have resulted in inconsistent packaging standards and increased prices.

The attorneys general expressed "collective concern" that the proposed guidelines may violate the Sherman Act's prohibitions on anticompetitive business practices by ensuring as many stakeholders as possible, across entire markets, engage in compelled collaboration efforts that would not otherwise occur in a normal, unrestrained market. These practices, according to the attorneys general, artificially change the output and quality of goods and services, contrary to typical market forces.

The letters also highlight potential negative impacts on state economies, including higher costs for consumers, unreasonable restrictions on trade, and reduced output and quality of goods and services. The letters note that the groups' good intentions do not excuse violations of antitrust laws.

The letters request that each organization respond by addressing these concerns, providing the legal basis why each organization contends it is not violating antitrust or consumer protection laws, and submitting supporting documentation. The Consumer Goods Forum has publicly commented that its programs are voluntary, transparent and backed by antitrust compliance measures. The U.S. Plastics Pact has publicly commented it is reviewing the letter and is confident its work complies with the law. The Green Blue Institute has not publicly commented.

The attorneys general have indicated that their inquiries will focus on whether the organizations' coordinated efforts either unfairly benefit certain companies or mislead consumers about the costs and impacts of sustainable packaging goals. The investigations and any resulting actions may unfold over many months. The letters signal potential legal challenges for sustainability collaborations that seek to standardize packaging and recyclability guidelines across entire industries.

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