The Federal Trade Commission today announced its Opinion and Final Order against Ohio-based ECM BioFilms, Inc., finding that the company acted deceptively by making false and unsubstantiated environmental claims about its product, a chemical additive that supposedly would make treated plastics biodegrade in a landfill within nine months to five years or within a reasonably short period of time, as alleged in an administrative complaint announced against ECM in 2013.
In its Opinion, written by Commissioner Terrell McSweeny, the Commission affirmed Chief Administrative Law Judge D. Michael Chappell’s Initial Decision that ECM made deceptive claims that plastics treated with ECM’s additive would completely biodegrade in a landfill within nine months to five years, and that scientific tests supported this claim. The Commission also upheld the ALJ’s finding that ECM encouraged its customers – companies that manufacture plastics – to pass on the deceptive claims to their customers and end-users.
Based on its own examination of the evidence, the Commission also found that ECM made implied claims that plastic products treated with ECM’s additive will biodegrade in a reasonably short period of time, or within five years, and that these claims were false and unsubstantiated. This reversed the ALJ’s finding that Complaint Counsel did not prove that ECM’s environmental marketing conveyed such implied claims.
“The seriousness of ECM’s deceptive conduct is evidenced by both the duration and pervasiveness of the biodegradation claims that permeated the company’s marketing efforts,” the Commission found, “and was enhanced by ECM’s customers’ inability to ‘readily judge for themselves the truth or falsity’ of ECM’s claims.”
The Commission’s Final Order bars ECM from representing that a plastic product or package is degradable, or that any product or service affects a plastic product’s degradability, unless the representation is true, not misleading, and substantiated by competent and reliable scientific evidence.
In addition, the Final Order requires that for claims relating to degradability of plastic products, ECM must ensure that either: 1) the entire plastic item will completely decompose into elements found in nature within five years after customary disposal; or 2) the claim is clearly and prominently qualified by either the time for complete decomposition or the type of non-customary disposal required and the availability of such disposal facilities. Also, ECM must have competent and reliable evidence to substantiate claims for any environmental benefit.
The Final Order also bars ECM from providing others with the “means and instrumentalities” to make any false, unsubstantiated, or otherwise misleading representations of material fact or environmental benefits; and bars the company from misrepresenting the existence, contents, validity, results, or conclusions of any test, study, or research.
The Respondent and Complaint Counsel appealed the ALJ’s ruling to the full Commission, which issued its Opinion and Final Order on October 11, 2015.
The Commission vote approving the Opinion and Final Order was 4-0, with Commissioner Maureen Ohlhausen dissenting in part and issuing a separate statement. In her statement, Commissioner Ohlhausen agrees with the ALJ that Complaint Counsel failed to prove that ECM’s unqualified “biodegradable” claim caused reasonable consumers to believe that treated products would biodegrade in a reasonably short time period. This is because, in her view, the extrinsic survey evidence offered was methodologically flawed and otherwise unreliable and therefore failed to prove that the average or typical consumer would perceive this implied claim.
ECM may file a petition for review of the Commission decision with the U.S. Circuit Court of Appeals within 60 days of service of the Final Order.
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Mitchell J. Katz
Office of Public Affairs