Global Antitrust Sustainability Hit Map (North America)

North America

Companies are experiencing increasing demand from both governments and consumers to achieve environmental goals and behave responsibly. To achieve these goals, companies may need to work together to remain efficient. Nevertheless, sustainability agreements remain subject to competition law. However, the regulatory landscape to remain compliant remains a challenge. Global competition authorities have varying priorities when it comes to sustainability: some focus on combating greenwashing claims; others aim to create safe havens and clear frameworks for improving collaboration between competitors to address sustainability issues. This lack of consistency results in a patchwork of rules worldwide.

This interactive map provides a high-level overview of the latest developments in selected jurisdictions and highlights the most important recent and expected changes to competition rules that reflect sustainability considerations. Where relevant, specific merger policy guidelines are provided.

This map is based on the knowledge built up through White & Case’s longstanding presence in these jurisdictions, its close relationships with local attorneys in the area, and on publicly available sources. Should you require advice on specific projects, distill common principles, or more detailed information on a specific area of ​​law (or others not on the map), please contact Martin M. Toto, Michael Hamburger, Kristen O’Shaughnessy or your usual White & Case contact person. This page was last updated in April 2024. See also the ESG and sustainability page on the ESG regulatory framework more broadly.

OECD

Horizontal agreements in the environmental context: In 2020, the OECD released a paper discussing whether competition policy should be influenced by sustainability. The 2020 document follows the OECD’s 2010 document, which looks at the interaction between horizontal agreements with environmental objectives and competition law policy from a national perspective.

The 2020 paper also analyzes the substantive application of competition law to sustainability issues by examining the extent to which competition law can be interpreted in a way that promotes or restricts sustainability initiatives. In addition, Australia and New Zealand, Germany, Greece, Lithuania and the Netherlands have submitted contributions to this discussion. The 2020 OECD paper provides a thorough introduction to the state of sustainability in the context of competition law. It encourages agencies to be clear about their objectives and priorities to provide clarity on how sustainability fits into competition law, highlighting formal and informal guidance. It also examines approval procedures, sandboxing, admissible evidence, capacity, fines and international cooperation as possible measures to promote sustainable goals. In December 2021, the OECD Roundtable reassessed these issues and published a follow-up paper specifically addressing environmental considerations in competition enforcement. In addition, the 2022 OECD Open Day for Competition focused, among other things, on green innovation. In December 2022, the OECD Global Forum on Competition will discuss the objectives of competition policy, including whether “competition law and policy need to adapt as a policy instrument to better respond to socio-economic trends, such as the increasing importance of sustainability” .

Canada

Merger and antitrust rules: Currently, under the Competition Act and associated guidelines in Canada, public policy considerations, including environmental objectives, are distinct from pure competition considerations and as such fall outside the powers granted to the Canadian Competition Bureau ( “CCB”). “).

In Tervita , the Supreme Court of Canada confirmed that environmental impacts may be taken into account when considering an efficiency improvement defense to the extent that there are associated quantifiable economic impacts. However, the defense against the efficiency improvement was withdrawn in December 2023, making the Tervita decision less relevant for future merger issues. It remains to be seen to what extent efficiency improvements will be taken into account by the CCB and the Competition Tribunal in future merger assessments.

Other cases focus on greenwashing, where misleading environmental marketing claims are deemed to violate the Competition Act. For example, in January 2022, Keurig Canada agreed to pay a C$3 million fine, donate C$800,000 to a Canadian charity and pay C$500,000 in costs following the CCB’s investigation into its misleading environmental claims about its recyclability of her single-serve coffee. pods.

Change on the horizon? In November 2023, the Canadian government introduced amendments to the Competition Act, which would, among other things, introduce sustainability-specific provisions. Specifically, the pending changes would introduce a new civil misleading advertising provision targeting misleading environmental claims. When a representation to the public about (i) the benefits of a product in protecting the environment, or (ii) the effects of a product in reducing environmental or ecological damage, is not based on adequate and proper testing, this can be examined under the proposed provision. Please note that such claims are currently being investigated under existing misleading advertising provisions, which require that all performance claims be based on adequate and proper testing.

Certificate of Conformity for Sustainable Cooperation Agreements: Once changes have been implemented, parties can request a certificate of conformity for their agreement aimed at protecting the environment; provided that the Commissioner of Competition is satisfied that the agreement will not materially diminish or prevent competition. The certificate would protect an agreement against actions taken under the conspiracy, bid rigging, agreements between financial institutions and civil anti-competitive agreement provisions of the Competition Act. A certificate can be valid for a maximum of ten years, but can be extended for a further maximum of ten years.

The proposed changes are still before the Canadian parliament.

United States

Focus on ESG at the State Level: Certain conservative attorneys general have launched investigations into signatories of global climate initiatives, alleging that coordinated ESG efforts by banks, asset managers and insurers are de facto anticompetitive horizontal agreements.

Several states have also passed anti-ESG legislation, including laws that restrict or prohibit state entities from doing business with companies that reportedly boycott fossil fuel businesses or investments, and laws that prohibit sovereign wealth funds from investing in ESG.

Focus on ESG at the Federal Level: At the federal level, the Republican majority in the House of Representatives formed a “Republican ESG Working Group” to combat potential market damage from ESG policies. Republicans have launched an investigation into Climate Action 100+ and are promising to further investigate and hold hearings on the alleged anticompetitive effects of entities such as financial firms and energy companies participating in global ESG initiatives. In June 2023, the Republican ESG Working Group released an interim report identifying challenges facing climate-related financial services and priority areas to respond to these concerns.

Current U.S. Agency Position: The U.S. antitrust agencies, the Federal Trade Commission (“FTC”) and the Department of Justice (“DOJ”) believe that current antitrust laws provide sufficient flexibility to allow for well-structured and pro-competitive joint action on to enable competition in the field. the pursuit of social welfare objectives. While the agencies have not publicly investigated ESG initiatives or taken enforcement actions related to participation in ESG alliances, they have maintained that there is no automatic ESG exemption for conduct that violates antitrust laws.

The FTC has continued to take enforcement actions against companies for “greenwashing” – a company making environmentally friendly claims about its products that the FTC alleges misrepresent a company’s ESG activities and/or exaggerate the environmental benefits of its products . Furthermore, the US agencies have suggested that a lack of commitment to ESG policy may be a reason to challenge a proposed merger based on a newly proposed holistic approach to merger assessment.

The Securities Exchange Commission (“SEC”) has proposed rules and rule changes that would require publicly traded companies to disclose climate-related information and require investment advisors and investment companies to disclose ESG factors that funds and advisors consider.

How should companies proceed? Companies should carefully assess how they structure and describe their ESG policies, as well as whether and how they address third-party ESG initiatives.