It has been an exciting two days at the National Advertising Division's Annual Advertising Law Conference. I moderated a panel where the FTC BCP Director of Enforcement, Jim Kohm, announced that the revised proposed Green Guides will be made available at 11AM EDT on October 6th. (Return here tomorrow for all the details!)
Commissioner Brill provided the keynote address yesterday where she gave a preview overview of the changes. By way of background, she reminded the audience that the original Green Guides, first published in 1992 and updated in 1996 and 1998, provide both general and specific guidance on how to make truthful and substantiated environmental marketing claims and "are more relevant than ever before." She said such claims can be important to environmentally conscious consumers, but only if true, particularly because these are largely credence claims or claims consumers cannot determine based on use if the product actually possesses the touted benefit. She said there were over 450 attendees to the three 2008 green workshops held by the FTC Staff. Further, the FTC commissioned consumer research on how consumers understand general environmental claims and specific claims such as biodegradable, renewable energy, renewable materials, and carbon offsets. The Guides needed updating to take into account new science and current consumer impressions of such claims. With the publication of the proposed Guides come a number of specific questions to which the FTC staff is soliciting comment. Commissioner Brill also said the staff is very interested in receiving evidence during the comment period, particularly any consumer perception studies others may have conducted. The goal of the new guides is to "provide better, evidence-based guidance."
Here is a preview of what can be expected tomorrow:
- The proposed Guides strengthen that unqualified general environmental claims should be avoided. The consumer research found that when consumers saw a "green" or "environmentally friendly" claim that they took away that the product had specific and far reaching environmental benefits (e.g., nontoxic, recyclable, made with recycled content) and few products do all of these things. Use of such general claims, to avoid running afoul of Section 5, will need to be qualified clearly and conspicuously to tell consumers the specific environmental benefit(s) they can expect.
- Use of Seals of Approval or environmental certificates will be treated like endorsements and should meet the criteria outlined in the FTC's Endorsement and Testimonial Guides. If the seal of approval is provided by a trade association in which the advertiser is a member, this must be disclosed. If the seal is not a third party seal, but issued based on an advertiser's internal certification program, this must be disclosed. A seal itself can claim a general environmental benefit, and qualifying language must be included making clear the expected benefit(s).
- There is the potential for consumer deception through use of renewable energy and renewable materials claims, and so marketers must include language making clear what is renewable (e.g. use of wind energy in manufacturing).
Commissioner Brill also discussed the FTC's new substantiation language in its recent consent orders with Iovate and Nestle and in the notice complaint filed in the action against Pom. She said the new language is designed to improve the enforceability of the orders.While some have said this represents a shift to a more rigorous substantiation requirement and a departure from the standards articulated in the FTC's Deception Policy Statement, "reports of [the flexible substantiation standard's] demise are greatly exaggerated -- it is alive and well." She explained that the two clinical studies required to support future claims contained in the orders was based on agreement by the FTC's experts that this was the level of substantiation required in these particular cases. She said going forward that the FTC "will use the new provisions on a case-by-case basis depending on what experts say is needed for the claims at issue."
She also reviewed the revised Testimonials and Endorsement Guides, which "confirm that well-settled truth in advertising principles apply to new media" and provide "important new and expanded guidance" that she is "confident industry will put into practice." We plan to blog further about this later in the week when we will detail comments provided by Mary Engle, Director of Advertising Practices, on enforcement of the new guides in the year since they were issued. Stay tuned!