The Competition Authority has today published a decision No. 9/2013, Complaint by the Icelandic-American Chamber of Commerce regarding the Environmental Agency's promotional activities on environmental labels. In its decision, the Competition Authority recommends that the Environmental Agency establish procedures for the promotion of environmental labels, with the aim of ensuring that producers of certified products are not discriminated against.
The investigation into the matter was initiated following a complaint from the Icelandic-American Chamber of Commerce Ltd. (ÍSAM). The letter requested that the Competition Authority would take action pursuant to b. sub-paragraph of paragraph 1, Article 16 of the Competition Act. No. 44/2005 regarding the alleged anti-competitive conduct of the Environmental Agency. The first part of ÍSAM's complaint concerned the Environmental Agency's „good start“ project, in which new parents are provided with information on the quality of products certified with the Nordic Swan Ecolabel and are also given samples of specific certified products. Secondly, the complaint concerned the Environmental Agency's general promotional activities for the Swan label and Swan-certified products. ISAM argued that by doing so, the agency was unlawfully subsidising the marketing activities of the company's competitors.
The decision addresses the legal framework for environmental labels and the relationship between environmental labelling and competition law. It concludes that voluntary environmental labels, run by independent bodies on an objective basis, do not distort competition within the meaning of competition law. On the contrary, such schemes are designed to create a specific demand for the characteristics of products and services that consumers would not otherwise notice without significant cost. Furthermore, such environmental certification is also likely to create a specific market for the qualities of a product produced in an environmentally friendly way, thereby contributing to environmental protection.
The Competition Authority was of the opinion that the Environmental Agency's general promotional activities concerning environmental labels and the implementation of the „good start“ project in this case did not provide grounds for the Authority to exercise its powers under Article 16(1)(b) of the Competition Act in the matter. The Competition Authority, however, recommends that the Environmental Agency establish procedures for the promotion of environmental labels, with the aim of ensuring that producers of certified products are not discriminated against.
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