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Legal Review: FTC’s Proposed Green Guides Poised to Compost Common Green Claims

1 Nov, 2010 By: Jeffrey D. Knowles, Venable LLP’s Advertising, Gary D. Hailey Response

Most of you will be familiar with the recent rewriting of the Federal Trade Commission’s (FTC) Guides Concerning Use of Endorsements and Testimonials in Advertising. The FTC has now proposed revising to its Guides for the Use of Environmental Marketing Claims, a.k.a. the “Green Guides.”

There you go again, FTC.

One of the more important proposed additions to the Green Guides is an explicit statement that marketers shouldn't make unqualified claims that products are “green,” “earth-friendly,” etc., because “it is highly unlikely that marketers can substantiate all reasonable interpretation of these claims.” The FTC wants marketers to use clear language to qualify general “green” claims to the specific and limited environmental benefits that marketers can substantiate. For example, instead of labeling a product as “eco-friendly,” the FTC would prefer “eco-friendly — contains 70% recycled content.”

The current Guides barely address third-party certifications and seals of approval, which have become increasingly popular with marketers. The FTC is proposing to add a new section to the Guides that cautions marketers not to use unqualified certifications or seals of approval because they likely convey general environmental benefit claims. As noted above, the FTC believes marketers are unlikely to be able to substantiate broad claims, and wants them to specify the particular environmental benefit the product offers.

According to the new section, third-party certifications are endorsements that must comply with the FTC’s Endorsement Guides. So if a marketer is a dues-paying member of a trade association and uses a certification from that association in its advertising, the Commission expects it to disclose that “material connection.” And if the marketer has created the certification itself, it must disclose that so consumers aren’t fooled into thinking the product has passed muster by an independent, third-party reviewer.

The proposed revised Guides would also contain specific sections devoted to particular environmental claims — including compostable, biodegradable, recyclable, made with renewable energy, etc.

For example, unqualified claims that an item is “compostable” should not be made unless governmental or institutional composting facilities are available to a “substantial majority” (at least 60 percent) of consumers or communities where the advertised product is sold. Likewise, an unqualified “recyclable” claim is fine only where recycling is available to that same 60 percent of consumers. Otherwise, the claim should be qualified — e.g., “This product may not be recyclable in your area.” The FTC believes that “positive” disclosures — e.g., “Check to see if recycling facilities exist in your area” — are usually not adequate.

The proposed Guides state that a marketer should qualify a “degradable,” “biodegradable,” or similar claim unless it can substantiate that the entire product or package will completely break down and return to nature within a “reasonably short period of time” after customary disposal — meaning one year. Marketers should not make such claims for items destined for landfills, incinerators or recycling facilities because complete decomposition will not occur in those locations within one year.

Claims that a product is “free of” a particular ingredient or chemical may be permitted even if it contains a minimal amount of that substance — it will depend on how significant even that small amount is. But even if a “free of” claim is literally truthful, it may be still deceptive if the item contains substances that pose the same or similar environmental risk, or the substance has never been otherwise associated with the product category.

If approved by the FTC, the proposed revised Guides could transform current green marketing practices. The FTC is seeking public comment on the proposed changes as well as on the specific questions in its Federal Register Notice until Dec. 10. And there’s a lot more to digest in the FTC’s proposal. After all, the Federal Register notice that contains the proposed revised Guides and the FTC staff’s explanation of them runs 225 pages.

If each of you printed it out, that would kill a lot of trees.

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