Mind the Consumer Behaviour: Overcoming Consumer Biases in the Assessment of Sustainability Cooperation Agreements

To this end, the European Commission has included in its draft revised Guidelines on Horizontal Agreements (the 'Draft Guidelines') a specific chapter on sustainability agreements that aims to clarify the assessment of these kinds of agreement under EU competition law.5 Among other things, the Draft Guidelines expressly acknowledge the possible need for agreements in the context of sustainability objectives to overcome consumers' cognitive biases or to prevent free-riding.6 Some national competition authorities across the EU, such as the Dutch Authority for Consumers and Markets (ACM) and Greek Hellenic Competition Commission (HCC), have also issued guidelines specifically addressing sustainability issues.7 These guidelines put the spotlight on the application of Articles 101(1) and (3) of the Treaty on the Functioning of the European Union (TFEU) to agreements among competitors and other market players in the supply chain that are pursuing sustainability goals.8 However, unlike the European Commission's Draft Guidelines, the guidance given by the Dutch ACM and the Greek HCC does not address the impact of consumers' cognitive biases on the launch of sustainable products. The washing machines agreement ("CECED") In one of the earliest examples of sustainability agreements assessed under EU competition law, in 2000 the European Commission approved an agreement among Europe's electronic appliances manufacturers and importers (grouped under the Conseil Européen de la Construction d'appareils Domestiques (CECED) association), covering 95 per cent of all sales, to cease the sale and import into the EU of the least energy-efficient washing machines.9 The purpose of the agreement was to reduce the energy consumption of domestic washing machines and reduce polluting emissions from power generation. According to the European Commission, the agreement aimed to reduce the potential energy consumption of new washing machines by at least 15 to 20 per cent over a period of four years rather than eight years (the time estimated that manufacturers would achieve similar efficiency rates in the absence of an agreement). [...]the agreement prevented consumers' access to cheap chicken-based products, from which they extracted more utility (in economic terms) than by consuming better-quality chicken-based products.