On June 9, Jim Kohm, Associate Director of Enforcement at the FTC’s Bureau of Consumer Protection testified before the House Subcommittee on Commerce, Trade, and Consumer Protection on the FTC’s green marketing efforts. He took the opportunity, to announce enforcement actions against Kmart, Tender Corp., and Dyna-E International, perhaps signaling the promised start of a significant green marketing enforcement push. The FTC’s administrative complaints alleged that Kmart, Tender Corp., and Dyna-E made false and unsubstantiated biodegradability claims for their American Fare paper plates, Fresh Bath Wipes, and Lightload Towels, respectively.
Kmart and Tender Corp. entered into consent orders resolving the cases against them (here and here). The consent orders are for settlement purposes only and are not admissions of wrongdoing or that the facts alleged in the complaints are true. The case against Dyna-E, however, will proceed to Part 3 litigation before an FTC ALJ. Dyna-E may be banking on an anaerobic biodegradability report posted on the product website that concluded:
[I]t is reasonable to assume that the product [Lightload Towels], excluding the packaging, is biodegradable in virtually any biologically-active environment, including soils, aquatic habitats, sewage, and biologically-active landfill conditions.
In contrast, the FTC alleges in its complaint against Dyna-E that the biodegradability claim is false
because a substantial majority of total municipal solid waste is disposed of by methods that do not present conditions that would allow for [the product] to completely break down and return to nature, i.e., decompose into elements found in nature, within a reasonably short period of time.
This suggests that the FTC is extremely skeptical of any biodegradability claims for consumer products because they usually end up in landfills. Dyna-E’s study also recommends using qualified biodegradability claims, which the advertising disclosed by the FTC does not appear to do.
In his testimony, Jim Kohm also noted that the FTC will be conducting a consumer perception study in connection with its Green Guides review (which regularly readers are familiar with). He stated that the study won’t be completed until later this year, suggesting that release of the revised Green Guides will be pushed back until late in 2009 or early 2010. Until then, the Kmart, Tender Corp., and Dyna-E cases indicate that the FTC is actively investigating green claims and renewing its enforcement efforts.
UPDATE (August 31, 2009): As we reported in June, the FTC filed an administrative complaint challenging Dyna-E’s claims that its Lightload towels are biodegradable. Last week, Dyna-E entered into a consent order resolving the matter. The consent orders are for settlement purposes only and are not admissions of wrongdoing or that the facts alleged in the complaints are true. In its press release, the FTC, we think for the first time, admitted publicly that the biodegradability claims challenges it brought in June were part of a broad-based green claims enforcement campaign.
