FTC files "greenwashing" charges against three companies based on eco-friendly advertising claims
The Federal Trade Commission announced on June 9, 2009 that it charged Kmart, Tender Corp., and Dyna-E International with making false and unsubstantiated claims that their products were “biodegradable.” The charges were announced in testimony before the US House Subcommittee on Commerce, Trade, and Consumer Protection of the Committee on Energy and Commerce. (FTC prepared statement: “It’s Too Easy Being Green”) Kmart and Tender agreed to consent decrees to settle the charges against them and the case with Dyna-E will proceed in administrative litigation with the FTC.
The FTC action is based on its “Green Guides,” which govern environmentally- and climate-friendly claims in advertising. Among other things, the Green Guides require that any unqualified claims that a product is biodegradable be based on scientific evidence that it will completely decompose within a reasonably short period of time under customary methods of disposal. The FTC alleges that the products identified in its complaints against these companies are typically disposed in landfills, incinerators, or recycling facilities where it is impossible for waste to biodegrade within a reasonably short time. The charges were based on Kmart’s using the word “biodegradable” to describe its American Fare disposable plates, Tender Corp. using the word to describe its Fresh brand moist wipes, and Dyna-E calling “biodegradable” its Lightload brand compressed dry towels.
The FTC’s testimony before Congress was presented by James A. Korn, Associate Director of the Enforcement Division in the FTC’s Bureau of Consumer Protection. Korn testified that “[i]n the past few years, there has been a virtual tsunami of environmental marketing,” marketing touting the “green” attributes of products and services. He said that the FTC plays an important role in helping to ensure that these environmental advertisements are truthful, substantiated, and not confusing to consumers. The agency, Korn said, accomplishes its role in two ways, first by publishing guidelines regarding appropriate advertising, and second, by bringing enforcement actions such as the ones announced this week. The Green Guides help marketers avoid making claims that are “unfair or deceptive” in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). The Guides explain how consumers understand commonly used environmental claims, such as “recyclable” and “biodegradable,” and describe the basic elements needed to substantiate those claims. The FTC plans to study consumers’ understanding of claims that were not common in 1992 when the Green Guides were originally written, including claims that products are “sustainable” and “carbon neutral.” (See also our previous post: “FTC Updating Green Guides.”)
Other recent enforcement actions by the FTC involving environmental marketing have involved two claims by marketers of “miracle” devices advertised to dramatically increase mileage in ordinary cars. (See e.g., FTC v. Dutchman Enterprises) In both cases, the FTC alleged that the claims for the devices violated basic scientific principles. Through litigation, the agency is seeking a permanent halt to the claims and reimbursement to consumers who purchased the devices.
http://www.globalclimatelaw.com/admin/trackback/139193
