The Italian Competition Authority hits the Italian oil-and-gas giant Eni with the highest possible fine in a “greenwashing” advertising case

This article has been first published on GALA on January 23th, 2020.

On December 20, 2019, the Italian Competition Authority (“Authority”) fined the Italian oil-and-gas company, Eni, an industry leader, with the maximum monetary sanction (EUR 5 million) for unfair commercial practices regarding environmental claims (Proceedings No. PS11400). The Authority ruled that an advertising campaign disseminated by Eni circulated false and omissive information relating to Diesel+ fuel’s positive environmental impact and on the particular characteristics of Diesel+ fuel in terms of consumption and greenhouse emission reduction.

On the Commercial Practice

The proceedings specifically related to Eni’s commercial practice of circulating advertising messages and information to promote Eni Diesel+ fuel on: (a) the positive environmental impact related to the use of such fuel, and (b) the particular characteristics of the fuel, in terms of fuel consumption savings and reductions in greenhouse emissions.

The contested advertising campaign consisted of several messages that included claims like: “Do you want your car to last longer and pollute less? […] an innovative fuel which takes care of your engine and reduces the environmental impact. Eni Diesel+, also thanks to its 15% renewable component, reduces consumptions, guaranteeing the engine’s full power. Yes, consumptions are reduced up to 4% and the greenhouse emission up to 40%”. Several other claims of the same or similar kind were used in Eni’s advertising online, in the press and in other printed media.

Furthermore, several other advertising messages reproduced, as product’s logo, a box in which the words “green” and “Eni Diesel+” were clearly associated.

The Authority’s Decision

Before entering into the details of the advertising messages, the Authority premised that environmental claims or “green” claims evoking the minor or reduced environmental impact of the products or services offered are becoming an important advertising tool that can significantly impact consumers’ purchase choices. However, the increased sensitivity of consumers to environmental issues has also made it easy for companies to mislead consumers by falsely representing the environmental benefits of their products or services in advertising messages. This phenomenon has come to be known as “greenwashing”. In the view of the Authority, “green” claims contained in advertising messages must:

i) precisely and unambiguously reflect the environmental benefits of the relevant products;

ii) be scientifically verifiable; and

iii) be communicated correctly.

That premised, the Authority specified that all the claims in the proceedings against Eni were qualifiable as “green” claims as they related to the positive environmental impact associated with the use of Eni Diesel+ fuel.

However, such claims did not meet the necessary requirements.

Indeed, the merits advertised sometimes referred to the abovementioned fuel’s “green” component (called “Green Diesel”) and sometimes to Eni Diesel+ fuel as a whole specifically through the use of the logo combining the “green” and the “Eni Diesel+” elements. This practice, according to the Authority, induced consumers to confuse the same “green” component with Eni Diesel+ fuel and to attribute to the fuel, as a whole, the merits actually ascribed only to the relevant specific component. Moreover, the proceedings’ preliminary finding showed that the qualification of the same specific component as “green” was in itself misleading as, by its nature, it has a significant negative impact on the environment, meaning that the environmental benefit attributable to that component is limited and relative and must be conveyed differently.

Furthermore, Eni’s contested advertising messages lacked any clarification or specification (s.c. supporting claims) to exemplify clearly, specifically, accurately and in detail the environmental benefit of the product. Indeed, explanations of this kind must accompany “green” or environmental messages to allow consumers to contextualize the claims and understand the exact environmental benefits that the use of the advertised product or service can provide.

References to Eni Diesel+ fuel having a “care effect” on the environment and the use of the term “renewable” in conjunction with the term “green” were also regarded as misleading, and likely to reinforce the suggestion that induced consumers to associate the fuel with an absolute positive effect for the environment.

The Authority specifically scrutinized the interpretation of the term “green”, clarifying that it evokes in the average consumer the idea of an absolute beneficial effect for the environment or, in any case, of the absence of environmental damage. This thesis is supported by the findings of the European Environment Agency mentioned by the Authority, according to which “the term ‘green economy’ is not consistently defined as it is still an emerging concept”. Accordingly, the Authority stated that the term “green” can be used to advertise a given product or process only if the use of the latter actually presents absolute (not relative) environmental benefits that can be proven.

Moreover, the Authority also regarded the advertising’s claims made by Eni in connection with the reduction of emissions and consumptions as misleading. Indeed, the reductions concerned were presented by Eni too generically and were not properly supported by evidence.

In light of the above, the Authority qualified Eni’s advertising campaign as an unfair commercial practice under Articles 21 and 22 the Italian Consumer Code and imposed a monetary fine on Eni amounting to EUR 5 million.

Even though the Authority frequently deals with environmental-related practices, the decision concerned is the first specifically and broadly addressing the issue of “greenwashing” in advertising and imposing the maximum possible sanction.

Eni’s Reaction in the Aftermath of the Decision

In a press release issued on January 15, 2020 and published on Eni’s website, the company affirmed that it was surprised to learn that the Authority considered certain environmental claims concerning Eni Diesel+ fuel to be misleading and, consequently, decided to sanction the company.

For this reason, Eni has announced that it will appeal the Authority’s decision before the Regional Administrative Court of Lazio (Tribunale Amministrativo Regionale Lazio – TAR Lazio).

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