CONSUMER LAW | AGCM fines GLS for misleading environmental claims and unfair practices

On 21 January 2025, the Italian Competition Authority (AGCM) issued Decision No. 31445 against the companies General Logistics Systems B.V., General Logistics Systems Italy S.p.A. and General Logistics Systems Enterprise S.r.l. (GLS), active in the logistics, transportation, and parcel delivery sector, for engaging in unfair commercial practices. Firstly, the AGCM found that environmental claims made by GLS (using phrases such as: “100% green energy in our facilities”) were ambiguous, misleading and inaccurate, in particular confusing the different activities of “compensation” and “reduction” of CO2 emissions, and were not supported by evidence. Said claims thus influenced consumers’ and business customers’ decisions, impacting GLS’ reputation among its competitors, particularly in a highly polluting sector such as freight transport. Furthermore, GLS imposed the mandatory subscription to the “Climate Protect” environmental sustainability program (the Program), which required the payment of a financial contribution for unwanted carbon offset certificates based on their deliveries. However, the amount of the contribution, to be paid only by smaller businesses, with the exemption of top clients, was determined by GLS without verifying the actual costs incurred by the customers and turned out to be more than 4 times higher than the actual compensation costs, allowing GLS to collect more funds than it spent on implementing the Program. Customers were also led to believe that GLS would significantly fund the Program, whereas, in reality, the customers and logistics partners bore all the costs connected. Finally, GLS issued to its affiliates and franchisees CO2 offset certificates, that were found unreliable and, therefore, potentially misleading, as they could have been interpreted as an expression of the actual carbon footprint of the entities to whom they were issued. Indeed, because of such certificates, a GLS franchisee could be considered more virtuous than one of its competitors (and vice versa), thus undermining the viability of the certification system from the perspective of consumers who would choose their carrier based on its greater/lower commitment to the environment. In light of all the above, after qualifying the commercial practices at issue as unfair and in violation of Articles 20, 21, 22 and 26, letter f) of the Italian Consumer Code, the AGCM imposed  a fine of €8 million on GLS.

Newsletter n. 104 – February 2025