The intersection of environmental concerns and competition law has become a topic of growing interest in recent years. Consumers increasingly take environmental issues into account when making purchase decisions and businesses are progressively integrating sustainability initiatives as part of their commercial strategies, aiming to portray themselves and their products or services in the ‘greenest’ light possible.

However, while the supply of “green” products has increased, there has also been an increase in false or misleading environmental ads or claims, commonly known as “greenwashing”. These practices may harm competition as they are able to mislead consumers into believing they are making environmentally friendly choices, when that is not actually the case. 

1. Spanish ruling on green campaigns 

On 21 February 2025, a Spanish Regional Court addressed this issue in the first ruling that examines greenwashing in the context of an unfair competition claim in Spain (Judgement No. 12/2025 of Commercial Court No. 2 of Santander). The case involves two leading players in the Spanish energy sector -Iberdrola and Repsol- where the former claimed that the latter would have misled customers over its environmental policies, in breach of the Spanish Unfair Competition Act (Law 3/1991 or “UCA”). 

Iberdrola argued that Repsol’s corporate website and several of its advertising campaigns promoted an image of sustainability, environmental friendliness and leadership in the energy transition, aiming to gain a commercial advantage. According to the applicant, Repsol’s historical focus on the sale of fuels (further expanded into the electricity and gas market, in which they directly compete), along with their sustainability claims, could mislead consumers and distort competition to the detriment of other operators in the market. 

However, Repsol has denied that the company has engaged in greenwashing through its advertising campaigns and argued that it had merely expressed its commitment towards sustainability in some of its communication campaigns and public reports. The Court supports the idea that sustainability encompasses economic, social, and environmental dimensions and affirmed that, while Repsol’s statements could create a positive image, they did not necessarily mislead consumers about its business operations.

In this regard, the Court has shed some light in relation to the legal boundaries of sustainability and unfair competition claims and, among other issues, has given importance to the presumed average knowledge of consumers in the energy sector and potential effects on the relevant markets.

1.1. The concept of “average consumer” in the energy sector

To assess the potential misleading nature and effects of Repsol’s campaigns, the Court carried out an assessment of the “average consumer” in the energy sector and concluded that consumers nowadays are more informed and generally aware of the environmental impact of fossil fuel companies. Therefore, the current average consumer could easily identify Repsol with the traditional hydrocarbons market, and their purchasing decisions would be primarily based on price rather than the “green cover” of some of the companies’ products.

This reasoning led to the dismissal of the claims relating to Repsol's ‘greenwashing’ practices, as the Court concluded that these were unlikely to mislead a reasonably attentive consumer.

1.2. Highlights regarding unfair competition practices

The Court also addressed the issue of the active standing requisite with regard to unfair competition claims. The UCA generally allows affected companies to bring claims against direct competitors that may have infringed the law. However, the Court considered that whereas Iberdrola had the right to challenge Repsol’s electricity-related advertising, claims regarding Repsol’s hydrogen and biofuel campaigns should be excluded, as no direct competition between the companies existed in those markets. This interpretation allows the Court to ensure that sustainability claims are not broadened solely based on environmental concerns without proving effects on the relevant market.

In this regard, the Court also stated that corporate websites are not part of a company’s commercial strategy, as these websites are primarily designed for investors, stakeholders, and regulators, rather than for consumers. Since Repsol’s website did not directly promote its products or influence purchasing decisions, the Court concluded that the information published on their website should not be considered as marketing actions contrary to unfair competition rules. 

2. Conclusions and trends

The Spanish Court has acknowledged that EU regulations are tightening sustainability-related obligations as, despite dismissing Iberdrola’s claims in this case, the Court acknowledges the potential future increase in legal scrutiny coming from the application of Directive (EU) 2024/825, which strengthens consumer protection against misleading environmental claims.

This judgement may set a relevant precedent for how competitors approach sustainability and environmental claims in their marketing strategies and corporate branding and pave the way for further green actions like this to follow, suggesting that sustainability claims may have to play hand in hand with competition law limits.

If you need more information or further guidance in this area, please contact Candela Sotés.

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