On-Line Retailers Coming Under Fire from EPA

On February 20, 2018, Amazon agreed to pay more than $1 million to settle an enforcement action brought by the U.S. Environmental Protection Agency (EPA) alleging violations of the nation's pesticide law (the Federal Insecticide, Fungicide, and Rodenticide Act; FIFRA). EPA alleged that Amazon violated FIFRA by selling six unregistered pesticide products, as well as two misbranded pesticide products that made false claims, including claims that the products were safe for children and pets.

Under the terms of the Consent Order, Amazon has agreed to pay a civil penalty of $1.2 million and to implement a Supplemental Environmental Project (SEP) at a cost of another $1.6 million. The SEP requires Amazon to develop a training program to "educate third-parties that sell pesticides through Amazon.com" and other on-line channels. The training program must cover topics including FIFRA and its implementing regulations, import requirements, exceptions from the registration requirements, and "foreign and "grey market pesticides." Amazon must implement the training program by April 2019, and ensure that all sellers of pesticides on Amazon.com complete the training before they offer pesticides for sale. Amazon is required to operate the training program for at least 36 months, during which time Amazon also must provide support staff to answer questions about the training program, as well as substantive questions about pesticide regulations.

Upon discovery of Amazon's alleged sale of unregistered and misbranded pesticides in January 2016, EPA issued a "Stop Sale Order" against Amazon to stop selling pesticides on Amazon.com. As a consequence of EPA's enforcement actions, during October 2016, Amazon refunded $130,000 to purchasers of the products at issue.

EPA's enforcement action against Amazon puts on-line and other distributors on notice of the need to verify a products' compliance with applicable laws before agreeing to market a product. This is no easy task given the breadth of products marketed on-line and the difficulty of policing product claims – which often trigger EPA's product registration requirements. For example, the popularity of claims that a product will control "germs" and "bacteria" are particularly troublesome, as antimicrobial products require EPA registration and must meet strict efficacy standards. Distributors in all sectors, especially on-line retailers, must also take note that state regulations may also apply to pesticide products. For example, with few exceptions, each state requires that pest control products have both a federal and a state registration. As the Amazon case demonstrates, failing to determine the compliance status of a pest control product being sold on-line can potentially disrupt business, adversely affect goodwill with customers, lead to expensive recalls, and result in significant penalties.

© Arnold & Porter Kaye Scholer LLP 2018 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.