A recent FTC law enforcement crackdown focused on allegedly deceptive biodegradability claims for plastics. Four of the cases settled and a fifth is heading to trial. Another action targeted green claims made by a company the FTC had sued before. Of course, the orders in the cases apply just to those companies, but if you’re intent on keeping your green claims clean, there’s a lot you can glean from the announcement.
1. Guidance is only a click away. “But I’m not a scientist. How can you expect me to know if my environmental claims are truthful?” We’ve heard that before, but sorry, it just doesn’t wash. It’s the law — and it’s always been the law — that companies need to back up objective product representations with solid proof. If you’re not sure you have scientific support for your green claims, don’t make them in the first place. It’s that simple. Furthermore, the FTC has scads of guidance available to advertisers. Read the Green Guides for practical advice on how truth-in-advertising principles apply. The Business Center’s Environmental Marketing page features more resources written with marketers in mind.
2. Testing, testing. One allegation in the latest round of cases is that the testing method wasn’t appropriate to support the biodegradability representations conveyed to consumers. The takeaway tip for marketers: Make sure the testing “fits” your ad claim. Furthermore, any protocol used to substantiate a green claim — or any claim, for that matter — should simulate how consumers actually use the product (and, in the context of green claims, how they dispose of it when they’re done). That’s why savvy marketers put the testing to the test before making bold promises to buyers.
3. The business of B2B. An interesting angle of the recent green cases is that the FTC sued the company that manufactured the additive that supposedly rendered plastics biodegradable and settled with retailers that made the claim to consumers. Businesses interested in staying on the right side of the law understand the breadth of the FTC Act. Depending on the circumstances, companies may be held liable for conveying claims directly to consumers and for giving others the tools they need — lawyers call it the “means and instrumentalities” — to make deceptive claims themselves.
4. Quell qualification quandaries. One area where marketers seem to stumble is in properly qualifying their claims — in other words, in explaining to prospective buyers the limited circumstances in which they can expect the advertised environmental benefit. The Green Guides offer insights into how to make qualified claims that comply with the law: “To avoid deception, marketers should use clear and prominent qualifying language that limits the claim to a specific benefit or benefits. Marketers should not imply that any specific benefit is significant if it is, in fact, negligible.” Refrain from overreaching by tailoring your claims carefully.
5. The Real World. “This is the true story of seven strangers . . .” OK, not that Real World. The point here is that if a product is advertised as, say, “recyclable,” consumers have to be able to recycle it in a real-world setting. The FTC’s action against AJM Packaging Corporation stemmed from claims that its products are biodegradable, compostable, and recyclable. Just one example of where the FTC says the company went wrong: AJM advertised its paper plates as recyclable, but few (if any) facilities accept used paper plates for recycling.
6. “Enforce” to be reckoned with. The purpose of FTC orders is to put procedures in place to encourage companies to comply with the law in the future. But if a business violates the terms of an order, the consequences can be consequential. The FTC had previously challenged AJM’s green claims as misleading. This time around, the conduct alleged to be deceptive will cost AJM $450,000 in civil penalties.