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FTC Continues Crackdown on Improper Environmental Marketing Claims

Beveridge & Diamond, P.C., January 24, 2014

The Federal Trade Commission (“FTC”) recently settled an enforcement action against Down to Earth Designs, Inc., which does business as gDiapers, for various improper environmental marketing claims regarding the company’s popular diaper system.  Details of the enforcement action, which focused on claims such as “biodegradable,” “compostable,” and “plastic-free,” are described below.

This represents the fourth set of publicized enforcement actions (totaling 12 defendants) against companies making environmental marketing claims since FTC updated its enforcement guidance, known as the Green Guides, in October 2012.  This action highlights the need for companies to carefully scrutinize their environmental marketing claims to ensure that they are not inadvertently implying any environmental benefits that cannot be substantiated, and to carefully review the placement of environmental marketing claims on product labels and advertisements (including websites).

The FTC Complaint

The diaper system marketed by gDiapers consists of a reusable outer shell (gPants), disposable pad liners (gRefills), and baby wipes (gWipes).  The claims contested by FTC include: 1) gRefills and gWipes are biodegradable or “certified” biodegradable; 2) gRefills and gWipes are compostable; 3) gDiapers are plastic-free; and 4) gRefills offer an environmental benefit because they can be flushed.

Biodegradable Claims

According to the FTC complaint, the company represented that gRefills and gWipes were “100% biodegradable” and “certified” biodegradable, including claims that the products would biodegrade when disposed of in trash cans, and that gWipes would biodegrade when flushed.  The Green Guides require an unqualified biodegradable claim to be supported by proof that the entire product or package will completely break down and return to nature within one year after customary disposal.  Any qualifications must be made “clearly and prominently.”

FTC alleged that the claims were deceptive or misleading because the company could not substantiate that either product would degrade in a landfill or that the gWipes would biodegrade when flushed.  The agency noted that the gRefills and gWipes packaging contained unqualified biodegradable claims on the front panel, revealing on the back and side panels that the products would only biodegrade in “home and commercially-approved composts.”  Furthermore, contrary to its “certified” biodegradable claims, FTC alleged that the company did not obtain any independent, third-party certification that either product was biodegradable. 

The day the enforcement action was announced, gDiapers responded on its website that it only intended to claim that the products would biodegrade when composted and that it had stated on its website and packaging that “nothing truly biodegrades in a landfill.”  The company also admitted that although it used an internationally recognized biodegradable testing protocol – ASTM D6400 – for testing, its test results were not certified by a third party.

Compostable Claims

FTC also alleged that compostable claims for gRefills and gWipes were improper because they were not adequately qualified to state that products soiled with solid human waste could not be composted.  The Green Guides require that unqualified compostable claims be supported by competent and reliable scientific evidence that all materials in the product or package will break down into, or become part of, usable compost safely and in about the same time as the materials with which it is composted.  Any necessary qualifications must be made “clearly and prominently.”

The agency stated that the gDiapers home page contained unqualified claims that its gRefills and gWipes were compostable – only on other parts of its website did the company disclose that only “wet ones” were compostable.  The company responded that its “goal has always been to communicate to our customers that home composting was for ‘wet ones only,’ which was always on our website and packaging.  This disclaimer is now in close proximity to any composting claims we make and a regular part of our communications to customers.”

Plastic-Free Claims

The company also claimed that the gDiapers system was “plastic free” and would help consumers “[e]nd plastic diaper use.”  FTC alleged that the claims were deceptive or misleading because the gPants component of the gDiapers system contains plastic.  The company stated on its website that gPants “were never meant to be part of the ‘plastic free’ claim.” 

Environmental Benefit Claims

Finally, the company claimed that gRefills offered an environmental benefit (“Earth-friendly” and “Eco-friendly”) because they can be flushed.  The agency alleged that these claims were improper because gDiapers did not disclose any specific environmental benefits and substantiate that the specific benefits were true.

The Green Guides prohibit unqualified environmental benefit claims.  Environmental benefit claims must be clearly and prominently qualified with specific and significant information about the claimed environmental benefit (e.g., “This eco-friendly car gets 60 mpg on the highway.”). 

Lessons for Marketers

As appears to be the case here, marketers often inadvertently imply broader environmental attributes than they can substantiate.  Claims that are not intentionally deceptive are the most common trigger for an FTC enforcement claim.  Marketers should carefully scrutinize their claims to ensure that each reasonable interpretation of the claim can be substantiated.  Furthermore, any necessary qualifying language should be clearly and prominently displayed in each place a claim appears.

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Beveridge & Diamond actively counsels clients on environmental marketing and other product-related environmental issues.  Please see our recent article “Top Ten Tips to Tell Customers you are ‘Going Green’ Without Running Afoul of FTC – or Twitter,” available here.  If you have questions about how the FTC Green Guides may affect the presentation or marketing of your products, please contact Shareholder, Laura Duncan (lduncan@bdlaw.com), or Associates, Lauren Hopkins (lhopkins@bdlaw.com) and Ryan Carra (rcarra@bdlaw.com). 

For a PDF version of this client alert, please click here.

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