On July 28, 2020, the FTC filed four complaints in federal courts across the country against companies who sell paint products used to coat homes and other buildings. At issue in the complaints are paint products that claimed to help insulate homes or buildings, saving the owner money on utility bills. The cases serve as
Raise the Green Bar Summit
We’re excited to plug an event that our client Made Safe is hosting next week (November 8) in New York City with the Good Housekeeping Institute. Made Safe, which works with companies to certify that their products do not contain ingredients known or suspected to harm human health, is partnering with Good Housekeeping for a
What’s the Federal Trade Commission Been Up to Recently?
A change in administration inevitably raises questions regarding the priorities and direction of federal agencies. To help set the record straight, Lesley Fair, a Senior Attorney with the Federal Trade Commission’s (FTC or Commission), Bureau of Consumer Protection, reminded us during last week’s NAD Annual Conference that the FTC has kept quite busy over the last year or so, with numerous enforcement cases arising out of the FTC’s Bureau of Consumer Protection. Ms. Fair also shared her views regarding the FTC’s key enforcement priorities that affect advertisers and marketers. Perhaps unsurprisingly, these priority areas generally relate to (i) advertising substantiation; (ii) use of social media, endorsements, and consumer reviews; (iii) matters involving privacy and data security; and (iv) allegations of financial deception. While such topics warrant serious consideration and attention for advertisers, one would be remiss in failing to mention that, in typical Ms. Fair fashion, she discussed these issues in a manner that not only kept the audience engaged, but largely entertained.
With respect to advertising substantiation, Ms. Fair took the opportunity to remind the audience that despite our obsession with smartphones—and our assumption that they can do almost anything except fold our laundry—the FTC will carefully scrutinize advertisers’ claims about their products, including health apps for smartphones, to ensure they are adequately substantiated. As an example, Ms. Fair mentioned the Commission’s January 2017 Settlement with Breathometer, Inc. and Charles Michael Yim in which the FTC alleged that marketers of two app-supported smartphone accessories, marketed to accurately measure consumers’ blood alcohol content (BAC), failed to adequately test the accuracy of the app and failed to notify customers that the app regularly understated BAC levels. In another smartphone settlement from December 2016, FTC v. Aura Labs, Inc. and Ryan Archdeacon, the FTC alleged that the marketer’s blood pressure app lacked reliable testing, and that the app’s readings were significantly less accurate than those taken with a traditional blood pressure cuff. In both of these cases, Ms. Fair suggested that FTC seemed particularly concerned due to potential safety issues arising from the lack of proper testing, especially where an intoxicated driver might get behind a wheel, or where a consumer may think his/her blood pressure does not present a health risk. These cases serve as a reminder that the FTC will evaluate substantiation with an especially critical eye where advertisers make health and safety-related claims.
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FTC’s Warning on Green Paint Claims Required a Second Coat
As we previously blogged, the FTC went after several paint companies (Benjamin Moore, ICP, YOLO and Imperial Paints) for advertising that their paints were VOC-free when that claim was true only before colors were added to the paint. Time and technology march on, and several manufacturers thought they had solved this problem, proclaiming boldly that their colored paint offers “zero emissions,” “zero VOCs” and “no harsh fumes” with lots of pictures of cute babies and/or pregnant women.
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NAD Goes Green Just Before St. Patrick’s Day
It’s hard to know where to begin when describing all the claims that were at issue in a recent NAD proceeding involving a challenge by Energizer to claims made by LEI Electronics (“LEI”) for its Eco Alkalines brand batteries. It’s safe to say, however, that if you’re looking for an easy way to recharge your power over the Federal Trade Commission’s (“FTC”) Green Guide requirements, you could read NAD’s decision in this matter and feel pretty juiced up.
Energizer’s challenge included alleged claims that its competitor’s batteries were eco-responsible; that they were “carbon neutral”; that they were recyclable and made from recycled materials; that they are non-toxic; that they have no environmental impact; and that they are biodegradable. (See what we mean?) Oh, and there were some actual performance claims thrown into the challenge as well.
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CoffeeTalk on Native Advertising with FTC Commissioner Brill
We like drinking coffee; thoughtful conversations with friends and watching videos so we thought why not do all three. Below is the first of periodic vlogs that we hope to bring to you – FTC Commissioner Brill sharing some good coffee, good company and some thoughts on Native Advertising and whose shoes she tries to
Crying for Federal Micromanagement — Complying with Conflicting Federal, State and Local Microbead Laws has Personal Care Products Companies in Need of Relief
Given the increasingly national scope of commerce, consumer products companies find it difficult to deal with issues regulated at the state level, particularly if states adopt differing and sometimes conflicting solutions to a common problem. As a result, industry often turns to the federal government for help in creating a common federal solution. The FTC’s Green Guides were originally born out of concern for conflicting state regulation of claims such as recyclables, while today manufacturers are concerned about efforts by states such as Vermont to regulate GMOs in food products. Recently industry participants utilizing microbeads also appeared to have successfully supplanted numerous state regulations for a uniform federal regulation. [Microbeads, by the way, are plastic microspheres that are commonly used in personal care products. Because they are so small they tend to end up back into the ecosystem, raising concerns about pollution.]
The Microbead-Free Waters Act of 2015, imposes a ban on manufacturing products with the beads as of July 1, 2017, followed by product-specific distribution bans in 2018 and 2019. Additionally, as industry participants had hoped, the Act also preempts state laws but the statute’s specific wording cracks the door to the enforcement of earlier-in-time state and local microbead restrictions.
The Act addresses microbeads according to the following schedule:
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Not Your Mother’s Red Solo Cup
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We have sometimes described finding materials that will quickly biodegrade in landfills as the Holy Grail of environmental marketing. But who would have guessed it would come in the form of a polystyrene cup?
Well, not exactly, the NAD cautioned in a recent decision. New Win Cup Holdings marketed the Vio cup, which it claimed would – thanks to a special additive — biodegrade 84.37% after 1,154 days in a wetter, biologically active landfill (wetter, biologically active landfills typically are landfills that are managed to promote the presence of water and oxygen, both of which accelerate biodegradation.) Further, Win Cup stated that it had used a specific ASTM test, that there was no certainty that the cups would continue to biodegrade further after 1,154 days, and, last of all, that a wetter, biologically active landfill might not exist in your area. Now that’s what we call a qualified claim!
Consensus Among FTC Commissioners on Green Claims Appears To Be Biodegrading
On Monday, the FTC Commissioners issued an opinion and Final Order, finding that ECM BioFilms, Inc. (“ECM”) made false, misleading, and unsubstantiated environmental claims about its chemical additive product. According to the FTC’s Complaint filed in October 2013, ECM’s advertisements and marketing materials claimed its product would cause plastics using its additive to: (i) biodegrade in a landfill within nine months to five years; and (ii) make the product biodegradable. The Complaint also alleged that ECM made deceptive establishment claims and that ECM provided the means and instrumentalities to its customers to make deceptive statements to consumers about finished products. We’ve written previously about similar challenges to biodegradability. What makes this opinion notable is the disagreement among the Commission about what claims can be inferred from an unqualified claim that a product is biodegradable, the reliability of a relatively new survey methodology, and what the “significant minority” language in the FTC’s Policy Statement on Deception (the “Deception Statement”) means in the context of extrinsic evidence.
In its opinion, the Commission affirmed Chief Administrative Law Judge D. Michael Chappell’s Initial Decision that ECM made deceptive biodegradability claims that plastics treated with its additive will completely biodegrade within nine months to five years and that ECM encouraged its customers to pass on these deceptive claims to consumers. However, upon its own examination of the evidence, the Commission reversed the ALJ and held that ECM also made implied claims that were false and unsubstantiated regarding how plastics treated with ECM’s product will biodegrade within a reasonably short period of time, or within one to five years by making a general biodegradability claim. The ALJ had found that the FTC failed to produce sufficient extrinsic evidence that ECM’s marketing made such implied claims.
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FTC Goes Seal Hunting: Issues Warning Letters About Green Seals
No, PETA will not be in an uproar. But if you certify Green claims or use someone else’s certification on your products you may want to continue reading.
In the past we have noted that third-party certifications and endorsements relating to environmental or “green” attributes are heavily scrutinized by the FTC as more “green” products continue to hit the market. Last year, we wrote about the FTC taking action against a plastic lumber marketer and a manufacturer for misleading advertising and marketing that claimed products to be made almost entirely out of recycled plastics.
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