ACCC launches investigation into greenwashing

The competition watchdog launches two internet sweeps to identify companies making “misleading environmental and sustainability marketing claims and fake or misleading online business reviews”.

The Australian Competition and Consumer Commission (ACCC) will investigate misleading sustainability-related marketing claims online in a bid to stamp-out greenwashing.

The online investigation will include over 200 businesses, with findings to later be published on the ACCC’s website.

Deputy chair of the ACCC Delia Rickard said the online investigations will be followed up with compliance, education and potential enforcement.

“Well-functioning online markets are key to the modern economy. To realise the full benefit, consumers need confidence to engage with online businesses,” Rickard said in a statement.

The investigations will continue over the next few weeks, however a publish date could not be confirmed and a spokesperson from the ACCC would not say if it would ‘name and shame’ offenders.

Rickard said the investigations were coming with Pro Bono News reporting on a speech she gave on the issue last month.

She said a similar review undertaken by the International Consumer Protection Enforcement Network (ICPEN) in 2020 found 40 per cent of environmental claims were potentially misleading.

Sectors targeted will include energy, vehicles, household products and appliances, food and drink packaging, cosmetics, clothing and footwear.

“This sweep forms a core part of our work in actively monitoring for greenwashing in the market and will help inform what steps businesses can take to improve the integrity of their environmental claims,” Rickard said.

“In looking at claims, we are concerned about what the ordinary consumer will understand the claim to mean.” 

A second internet investigation will target fake or misleading online reviews and testimonials.

“This will be the first of a series of smaller-scale sweeps focusing on deceptive practices in the digital marketplace. 

“The sweep will target misleading reviews posted to business’ websites, Facebook pages and third-party review platforms,” she said.

“Misleading advertising by influencers on social media will be considered in a second sweep, which will focus on identifying posts that fail to clearly disclose advertising or sponsorship.”

She said the investigations have been motivated by an increasing range of manipulative marketing practices online.

“Consumers often rely on reviews and testimonials when making purchases, but misleading reviews can be harmful,” she said.

“Businesses can also be significantly impacted, particularly by negative reviews at the hands of competitors or third-party professional reviewers acting on behalf of a business. 

“Review manipulation of any kind can impact a business’ star or numeric rating, leading to an overall misleading impression of the business.”

“We are looking to identify businesses, review platforms or sectors where there is a pattern of misleading online reviews and testimonials that have the potential to cause significant consumer or small business harm. 

“Both positive and negative reviews and testimonials – including those that are incentivised – can be false or misleading, particularly if they are presented as impartial but are not.”