November 15, 2013

Revised Green Guides Provide Fuel for FTC Enforcement on "Biodegradable" Claims

Seller Beware: Consumer Protection Insights for Industry

A little over a year ago, the FTC issued revised "Green Guides" to offer updated guidance on the use of environmental marketing claims to advertisers, which we blogged about. Among other things, the revisions clarified the FTC's position on biodegradable claims, stating that "it is deceptive to make an unqualified biodegradable claim for items entering the solid waste stream if the items do not completely decompose within one year after customary disposal." The Green Guides also explained that "unqualified biodegradable claims for items that are customarily disposed in landfills, incinerators, and recycling facilities are deceptive." The FTC recently filed complaints alleging false or misleading representations against five different companies based on claims in those companies' advertising materials that their plastic products are biodegradable. These are the FTC's first enforcement actions dealing with biodegradable plastic claims since the 2012 revisions.

One of the FTC complaints was filed against ECM Biofilms, Inc., the manufacturer of an additive which it claims makes plastic products biodegradable. The complaint alleges that ECM Biofilms made false or misleading and unsubstantiated biodegradable claims to distributors and plastic products manufacturers by stating in its promotional materials that plastics made with its ECM additive are biodegradable. The complaint goes on to note that those distributors and manufacturers "in turn, treat plastics with respondent's additives… and sell ECM Plastics to customers and consumers in various plastic products advertised as biodegradable." The result, according to the complaint, is that ECM Biofilms provided those distributors and manufacturers with "the means and instrumentalities for the commission of deceptive acts or practices."

Two of the FTC complaints, were filed against companies who manufactured plastic products using the ECM additive. The complaints against these companies alleged that each of them made false or misleading and unsubstantiated representations that their products were biodegradable and that they were biodegradable "as a result of an additive from ECM Biofilms." The FTC has settled with both companies and proposed nearly identical consent orders, for them that would prohibit them from making any biodegradable claims unless the product "will completely decompose into elements found in nature within one year after customary disposal," as provided in the Green Guides, or the claim is qualified by additional information, such as the actual length of time to complete decomposition. The other two enforcement actions were directed to companies who manufacture plastic products that use additives similar to the one described above, but from different additive manufacturers.

This set of enforcement actions by the FTC should signal to companies that provide additives or ingredients to the manufacturers of products for sale to consumers that they should take heed of the Green Guides before making any advertising or marketing claims about the environmental effects of its materials on finished products. It is also a reminder to manufacturers and distributors of consumer goods that they should take care to substantiate any environmental claims themselves, rather than relying on marketing materials provided by the manufacturer of the materials that go into their products.

© Arnold & Porter Kaye Scholer LLP 2013 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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