In a judgment dated August 26, 2025, the Frankfurt am Main Regional Court prohibited Apple Distribution International Ltd. (“Apple”) from advertising its smartwatch as “CO2 neutral.” The court considered the advertisement to be misleading within the meaning of Section 5 (1) of the German Unfair Competition Act (UWG). This decision sets out further requirements for sustainability communication that companies should urgently observe.
Background to the allegations
Since 2023, Apple has advertised three models of the Apple Watch with the following statement, available online: “The Apple Watch is our first CO2 neutral product.” The advertisement was justified by claiming that the majority of emissions generated during the manufacture and transport of the Apple Watch were avoided from the outset and only a “small remainder” was offset by nature-based compensation projects. The company referred to a forest project in Paraguay involving eucalyptus plantations, which is intended to offset the “small remainder” of CO2 emissions.
The German Environmental Aid (“DUH”) considered the advertising to be “brazen greenwashing” and filed a lawsuit with the Frankfurt Regional Court seeking an injunction. It justified its lawsuit by stating that there were plans to cut down the eucalyptus plantations in question in 2029 and that Apple did not have sufficient follow-up contracts to ensure long-term utilization.
Consumers can rely on CO₂ offsetting until 2050
In the subsequent proceedings regarding the advertising of the Apple Watch, the Frankfurt am Main Regional Court ruled in favor of the DUH. It decided that Apple must refrain from this “type of advertising” (see Frankfurt/Main Regional Court, judgment of August 26, 2025, ref. 3-06 O 8/24).
Whether an advertisement is misleading within the meaning of Section 5 (1) UWG depends on the overall impression it creates among consumers as potential buyers. A look at the Paris Climate Agreement shapes consumer expectations. According to this Agreement, by the second half of the century at the latest, no more climate-damaging gases should be emitted than are removed from the atmosphere by sinks. As a result, consumers may assume that CO2 compensation is ensured at least until around 2050.
However, Apple has only leased most of the land until 2029. Apple was unable to provide evidence of a secured extension. The court therefore assumed that CO2 compensation is only guaranteed until that date, i.e., well before 2050.
Consequences of the decision
Apple is therefore currently prohibited from advertising the CO2 neutrality of Apple Watch models. Otherwise, it faces administrative fines of up to €250,000. It is not yet known whether the company has appealed the decision.
Beyond the civil law assessment, this “type of advertising” also raises the question of possible criminal relevance. From a criminal law perspective, fraud under Section 263 (1) of the German Criminal Code (StGB) may be considered here. However, the financial loss required for fraud will hardly be provable, as the Apple Watch is, objectively speaking, worth its retail price. In the context of the “diesel scandal,” case law has justified financial loss partly by the vehicles’ reduced resale value (see BGH, judgment of May 25, 2020, Ref. VI ZR 252/19). However, the insufficient compensation measures assumed by the Frankfurt Regional Court will have little impact on the resale value of the Apple Watch. There is therefore no objective financial loss.
In such cases, criminal law often refers to the legal concept of “individual loss impact”. This means that loss may also exist if the buyer cannot use the purchased item for its intended contractual purpose or in another reasonable way. However, this is hardly the case here, even if CO2 neutrality may have been a decisive factor in the purchase decision, since the Apple Watch can still be used for its intended purpose despite the misleading advertising.
Despite that, criminal liability under Section 16 (1) UWG is excluded because, from Apple’s point of view, sufficient compensatory measures were taken. Moreover, Apple would have had to aim to create the impression of a particularly favorable offer. This requires that the advertised characteristic provides a special incentive to purchase. However, such an incentive is not really present in the claim of CO2 neutrality when purchasing an Apple Watch.
Significance of the decision for companies
The decision once again highlights the requirements for climate and environment-related advertising. It thus follows the Federal Court of Justice, which in its ruling on advertising with the term “climate neutral” has already imposed increased requirements on consumer information (see BGH, ruling of June 27, 2024, Ref. I ZR 98/23). Companies that advertise their products as “CO2-neutral” or “climate-neutral” must therefore ensure that the underlying compensation measures not only actually exist but are also secured in the long term and in a reliable manner. Compensation that is merely limited in time (medium term) is not sufficient to meet consumer expectations and comply with the legal requirements of Sec. 5 UWG.
In addition, the EU Directive on empowering consumers for the green transition will in future prohibit environmental claims suggesting that a product has a neutral, reduced or positive impact on the environment in terms of greenhouse gas emissions if such claims are based solely on the compensation of emissions. The directive must be transposed into national law by March 27, 2026, and will apply from September 27, 2026.
Even though the proposal for a further EU Green Claims Directive, published in 2023, which aimed to establish further binding standards for sustainability statements, is currently on hold, companies must exercise the utmost caution when making any claims about CO₂ neutrality.