Rulings of the Reclame Code Commissie (Advertising Code Committee - ACC) on company advertisements are regularly being covered in the media. Increasingly, these rulings relate to complaints about the alleged sustainability of products or services, such as the rulings on the advertisements of Shell and Primark.
The ACC is a division of the Stichting Reclame Code (Dutch Advertising Code Authority), which oversees the regulation and self-regulation of advertising by the Dutch advertising industry (advertisers, communication consultancies and media), as set out in the Dutch Advertising Code.
Particularly in the field of advertising in which sustainability claims are made, the ACC has regularly ruled of late that some of those communications violate the Dutch Advertising Code. Complaints filed with the ACC can lead to reputational damage, but may also increasingly precede a civil lawsuit or the filing of a complaint with the Netherlands Authority for Consumers and Markets (ACM) (potentially resulting in an administrative fine; see also this blog).
In this blog, we address the five main questions that companies may have regarding the ACC.
- What is the ACC?
The purpose of the ACC is to promote the credibility and reliability of advertising. To achieve this objective, the ACC is in charge of assessing whether advertising is in accordance with the provisions of the Dutch Advertising Code. This general advertising code also comprises 24 special advertising codes, such as the Advertising Code for Alcoholic Beverages, the Sustainability Advertising Code, and the Advertising Code for Online Games of Chance. All these codes were originally set up by Dutch advertisers as a form of self-regulation.
The ACC consists of five members, an independent chair (usually a judge or a legal expert with judicial experience) and four representatives of parties involved in advertising: the media, advertisers, consumer organisations and ad agencies. It is worth mentioning that these representatives need not be legal experts. The Board of Appeal, which handles appeals against rulings of the ACC, is similarly composed.
- What is the ACC’s procedure?
Companies and consumers may complain about advertisements if they believe they violate the Dutch Advertising Code. Filing such a complaint is free of charge for consumers and social organisations (in principle, companies pay a €1,000 contribution). Few requirements apply to the reasons stated for the complaint. The threshold for filing a complaint is therefore very low, resulting in the ACC receiving over 4,000 complaints a year.
If a complaint is found to be admissible, the advertiser is given the opportunity to submit a response. A hearing may then be scheduled at which the complainant and the advertiser can explain their positions orally. In most cases, a complaint is heard by the plenary ACC. In certain cases, however, the chair himself or herself may decide on a complaint. The advertiser may then object to the allowance of a complaint by the chair to the plenary ACC.
The ACC may reject or uphold a complaint. In the latter case, it rules that the advertisement violates the Dutch Advertising Code. It then usually advises the advertiser not to advertise in such a way in the future. Appeals against ACC rulings may be filed with the Appeals Tribunal. Rulings of the Appeal Tribunal are final.
- What are the consequence of an ACC ruling?
Rulings of the ACC and the Appeals Tribunal are not legally binding. However, companies usually comply with ACC rulings, partly due to the naming-and-shaming on the public Non-Compliant list on the Advertising Code Committee’s website that would result from failure to do so. The ACC furthermore always reports such non-compliance to ACM. In practice, almost all companies therefore comply with ACC rulings: over 96% of advertisers adjust or withdraw the advertisement in question.
Companies are often unaware that an ACC ruling may also have wider consequences. First, the Committee’s ruling that an advertisement is misleading may also trigger administrative enforcement by ACM and the risk of a high administrative fine.
Second, if the ACC rules in favour of a complainant, that may be the prelude to civil litigation. An example is the recent case of Reclame Fossielvrij and Client Earth against KLM over its CO2 offsetting programme. Companies should also be aware that, although ACC rulings are not binding, courts do attach considerable value to them in civil proceedings in practice.
In 2014, for instance, the Court of Appeal of The Hague decided that ACC rulings are usually an ‘important indication’ of how the Unfair Commercial Practices section in Book 6 of the Dutch Civil Code should be interpreted. The court thereby referred to the ACC’s “special expertise”. In 2014, the District Court of Overijssel ruled in preliminary relief proceedings that an advertisement was misleading because that “already followed from the Advertising Code Committee’s decision of 21 October 2013, in which it found that the advertisement was misleading and therefore unfair within the meaning of Article 7 of the Dutch Advertising Code.” In a recent 2023 judgment, the Court of Appeal of The Hague held that an ACC ruling regarding inconsistency with advertising rules could be considered conclusive, absent evidence to the contrary.
- What are recent examples of greenwashing rulings by the ACC?
There have been several interesting ACC rulings in recent years. Many of these (valid) complaints related to allegedly misleading sustainability or environmental claims.
A case in point is a 2023 ruling on Primark advertisements. The clothing chain used posters with texts such as “Reducing CO2 emissions by 50%. So the planet can breathe freely”. The ACC found this sustainability ambition insufficiently substantiated to assume that the ambition would be achieved (within a reasonable period). Primark also used wording such as “Organic, recycled, sustainable and affordable cotton”. According to the ACC, it was insufficiently clear that these were ambitions of Primark, rather than results Primark had already achieved.
The ACC also corrected Shell in March 2024. The advertisements with the campaign slogan “We are changing for a cleaner future” were misleading, according to the ACC. The Appeals Tribunal found that Shell had failed to clarify the actual implementation of its sustainability ambitions, because its advertisements did not elaborate on these ambitions. Shell should therefore have made its communications more specific.
In response to a complaint filed against KLM regarding its CO2 compensation programme, the ACC ruled that a reference in an advertisement to the possibility of compensating CO2 emissions by using CO2 credits was permissible in and of itself. However, that was subject to the condition that the advertiser had to demonstrate on the basis of solid, independent, verifiable and generally recognised evidence that full offsetting of CO2 emissions was guaranteed in practice.
- What are the expectations for the future?
The recent successes of action groups before the ACC are expected to result in an increase in greenwashing complaints and complaints to ACM.
A potential gamechanger is the recent complaint by action group Reclame Fossielvrij against a TV advertisement by travel company TUI for holidays by air to Turkey. Earlier complaints by environmental organisations to the ACC always focused on alleged greenwashing, i.e. statements about certain positive environmental aspects. In the TUI case, however, Fossielvrij argued that advertising holidays by air is prohibited in and of itself, because it encourages behaviour that is harmful to public health and highly damaging to the environment.
Fossielvrij based its position on a change (as of 1 July 2023) in the explanatory notes to Article 2 of the Dutch Advertising Code. That article provides that “Advertising must be in accordance with the law, truth, good taste and decency.” Since last year, the explanatory notes state that “The provisions of the [Audiovisual Media Services Directive] that advertising may not encourage behaviour prejudicial to health or safety, or grossly prejudicial to the protection of the environment, are also covered by this article.”
The ruling that the ACC will issue on this complaint may have very far-reaching effects. It may not only lead to a ban on air travel advertising in general, but may also have implications for other products or services that are “grossly prejudicial” to the environment.
Outlook
ACC rulings have become increasingly important. Advertising in breach of provisions of the Dutch Advertising Code may give rise to publicity damage, to civil proceedings, or to a complaint to ACM. The complaint filed by Fossielvrij in the TUI case may furthermore have far-reaching consequences for companies operating in sectors that have a large carbon footprint or are otherwise environmentally harmful. Also in light of the fact that courts value the ACC’s opinion, this means that companies are well advised to take ACC proceedings in response to a complaint seriously.
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