The legal landscape surrounding clothing recycling and extended producer responsibility

(EPR) has evolved significantly, especially in Europe. France has been a pioneer in this area,
enacting laws to combat waste and promote the circular economy. The French law on
combating waste mandates the donation or recycling of unsold textiles and prohibiting their
destruction. The Extended Producer Responsibility (EPR) concept holds manufacturers,
importers, and retailers responsible for the entire life cycle of their products, including
textiles. On the same lines, the European Council has approved the Corporate Sustainability
Due Diligence Directive. The CSDDD creates a legal liability for companies relating to
environmental and human rights violations within their supply chain.

In India, ESG regulations are not consolidated into one piece of legislation but are spread
across various laws such as the Companies Act, environmental protection acts, and securities
regulations. However, these laws don’t apply to our company, for it is a private company
exempted from this. Anticipating the future of growing regulations in this arena, it is advised
that we be ready to adopt the requirements to adjust our ESG strategies and compliance
practices proactively.

So, H&M also started the clothes take-back program a few years ago to attain a true circular
economy, but later a lawsuit against them was filed for '“false” and “misleading”
sustainability marketing. They were allegedly greenwashing their products and presenting
them as environment-friendly when they were not. Therefore, it is advised that we should not
over-advertise and get ourselves into legal trouble.

Additionally, There is a lot of ambiguity around AI. The Competition Commission of India
recently announced to conduct of a market study on AI, reflecting a growing recognition of
the technology's impact on competition and its potential anti-competitive implications in
India. Market studies will provide the CCI with insights into the dynamics of AI adoption in
India and help identify practices that could harm competition.
However, antitrust authorities worldwide have already dealt with cases concerning
algorithmic automated collusion due to the use of AI, leading to anti-competitive outcomes
such as price-fixing or market sharing.

In fact, there was a case where Air Canada’s AI chatbot promised a discount that wasn't
available, and they tried to escape by saying that it was the chatbot’s liability and not there.
But the court rejected this argument and ruled against the airlines, instructing it to pay the
damages. Therefore, it is advised that the odds be weighed well before implementing AI in
the system.