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ACCC internet sweeps will target ‘greenwashing’ and online reviews

Sheep Central, October 5, 2022

ACCC deputy chair Delia Rickard Image – ACCC.

SHEEP meat and wool businesses making misleading sustainability claims in selling goods directly to consumers may be picked up by internet sweeps launched by the Australian Competition and Consumer Commission this week.

The ACCC said it had launched two internet sweeps yesterday to identify misleading environmental and sustainability marketing claims and fake or misleading online business reviews.

The sweeps are being conducted over the coming weeks as part of the ACCC’s compliance and enforcement priorities for 2022-23, with the broad aim of identifying deceptive advertising and marketing practices by businesses or industries, the ACCC said.

At least 200 company websites will be reviewed in the sweep for misleading environmental claims across a range of targeted sectors including energy, vehicles, household products and appliances, food and drink packaging, cosmetics, clothing and footwear.

ACCC deputy chair Delia Rickard said as consumers become increasingly interested in purchasing sustainable products, there are growing concerns that some businesses are falsely promoting their environmental or green credentials.

“Misleading claims about products or services undermine consumer trust and confidence in the market.

“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,” she said.

Clothing and food will in the sweep mix

An ACCC spokesperson said as part of its greenwashing sweep, the ACCC is identifying misleading environmental and sustainability claims made by businesses across a range of different sectors.

“This includes claims made in relation to clothing and footwear products, as well as food and beverages.

“If a sheep meat or wool business makes misleading sustainability claims in selling goods directly to consumers, or elsewhere along the supply chain in selling goods to other businesses, this may be picked up by the sweep and/or in any compliance or enforcement activity that is conducted following the sweep,” the spokesperson said.

Ms Rickard said in looking at claims, the ACCC is concerned about what the ordinary consumer will understand the claim to mean.

“The ACCC won’t hesitate to take enforcement action where we see that consumers are being misled or deceived by green claims,” Ms Rickard said.

At the same time, the ACCC said it will conduct a separate internet sweep targeting 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. Misleading advertising by influencers on social media will be considered in a second sweep, that will focus on identifying posts that fail to clearly disclose advertising or sponsorship.

“Unfortunately, consumers are facing an ever-increasing range of manipulative marketing techniques designed to exploit or pressure them, due in part to the huge number of online information sources available.

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

The ACCC said at least 100 businesses will be reviewed in this initial sweep, targeting areas in which consumers most commonly rely on reviews including household appliances, electronics, fashion, beauty products, food and restaurants, travel services, sport, home improvement, kitchenware, health products, as well as furniture and bedding.

“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,” Ms Rickard said.

“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.

“The sweeps will be followed up with compliance, education and potential enforcement activities and we also want to improve awareness to enable consumers to make more informed purchasing decisions,” she said.

“Well-functioning online markets are key to the modern economy.

“To realise the full benefit, consumers need confidence to engage with online businesses,” Ms Rickard said.

The ACCC will publish the findings of the sweeps once they are collated and analysed.

ACCC targeting sustainability claims in compliance priorities

Each year, the ACCC announces a list of compliance and enforcement priorities. These priorities outline the areas of focus for the ACCC’s compliance and enforcement activities for the following year. As part of its 2022-23 compliance and enforcement priorities, the ACCC is prioritising consumer and fair trading issues in relation to environmental and sustainability claims as well as issues relating to manipulative or deceptive advertising and marketing practices in the digital economy.

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Comments

  1. Patrick Francis, October 6, 2022

    Congratulations to the ACCC for undertaking internet sweeps of farm business and retailers for web site ‘greenwashing’ claims. Let’s hope the commission requires businesses to provide evidence of positive trends over at least five years in key environmental ecosystem function outcomes and data for greenhouse gas emissions and abatement. Sustainability claims have become par for the course on most business web sites, but usually lack any trend data within the business or within suppliers businesses to support them.

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