New FTC "Green Guides" -- Fundamental Issue is Deception
Attorney and guest columnist Jay Eckhardt of Stoel Rives has analyzed the FTC's proposed "Green Guides" for marketing, and finds they don't represent a radical shift from the 1998 version.
October 08, 2010
By Jay Eckhardt
"Given the FTC's renewed interest in this subject... it would be imprudent to disregard the new Guides."
--Jay Eckhardt, associate, Technology and Intellectual Property law group of Stoel Rives LLP
Following several years of development, and much anticipation in recent months, the Federal Trade Commission finally released the "Proposed, Revised Green Guides" yesterday. The new Green Guides will be open for public comment until December 10, 2010. Thereafter, according to the agency's press release, the FTC will determine if and how to issue the new Guides.
The current official Green Guides, last updated in 1998, provide non-binding "interpretations" of federal consumer protection laws, including Section 5 of the FTC Act (15 U.S.C. § 45), which empowers the agency to punish deceptive practices. In general, the Guides establish that false or deceptive environmental marketing claims can be challenged under the FTC Act. The Green Guides also provide instruction and interpretations of marketing buzz words that were popular in 1998, such as "biodegradable," "compostable," "recyclable," "refillable," and "ozone safe."
The proposed new Green Guides address the terms found in the 1998 edition, but also address several new issues that arise in present-day green marketing, including:
- environmental seals of approval,
- "free-of" and "non-toxic" claims,
- carbon offsets,
- claims concerning renewable energy, and
- claims about renewable materials.
The proposed Green Guides reinforce and restate the FTC's policy that environmental marketing claims should be supported by credible scientific evidence. In addition, the proposed Guides discourage sweeping unqualified claims. For example, the Guides explain that an unqualified claim that a product is "eco-friendly" is inherently deceptive. In contrast, a simple clarification – if it can be substantiated – may be acceptable. The Guides state that a claim such as "eco-friendly: made with recycled materials" is not deceptive if the clarification is prominent and can be proven.
For the most part, the Green Guides don't represent a radical shift from the 1998 version. On a careful reading of the revised Guides and the preceding 186 pages of FTC analysis and comment, it's clear that the fundamental issue is deception.
It's deceptive to say your product has 50 percent more recycled contents than it used to, when your product only increases recycled content from 2 percent to 3 percent. It's deceptive to mark your product with your own green "seal of approval" and not disclose that you made up the seal yourself. It's deceptive to claim that you'll plant trees to offset carbon emissions from your products, when it will take 10 years for the trees to get big enough to actually offset those emissions.
Ultimately, it does not appear that the FTC is proposing a major shift in regulations. The key question for any environmental marketing claim remains the same: is the claim "deceptive" under Section 5 of the FTC Act? But the even bigger question is: how will enforcement change?
Last February, The New York Times reported that the FTC has filed seven complaints concerning environmental marketing claims since President Obama took office (compared to zero during the prior administration). If enforcement remains at that level, there can't be substantial application of the new Green Guides.
Then again, given the rapid growth of environmental marketing claims in recent years, the FTC's renewed interest in this subject, and the threat of state consumer fraud actions, it would be imprudent to disregard the new Guides.
More Energy Law Alerts are available at the Stoel Rives web site.