On April 8, 2022, the Federal Trade Commission (“FTC”) announced that it was using its Penalty Offense Authority to seek a $5.5 million penalty for deceptive environmental claims against Kohl’s, Inc. ($2.5 million) and Walmart, Inc. ($3 million).
The FTC charged both companies with falsely marketing dozens of rayon textile products as bamboo and with claiming that the bamboo textiles were made using eco-friendly processes when the process actually used toxic chemicals and resulted in hazardous pollutants.
The proposed orders settling the FTC’s complaints against Kohl’s and Walmart require that the companies:
- Stop claiming that a textile product is made of bamboo or bamboo fiber, unless they can substantiate it;
- For products made of bamboo or bamboo fiber, stop claiming that it is produced free of harmful chemicals, using non-toxic materials, or in a way that is safe for the environment or non-polluting, or has any other environmental benefits because it is derived from bamboo, unless they can substantiate it;
- Stop violating the FTC’s Textile Act and Rules by deceptively advertising textile contents; and
- Pay $5.5 million in penalties: Kohl’s and Walmart must pay civil penalties of $2.5 million and $3 million, respectively, under the FTC’s Penalty Offense Authority.
This action suggests that the FTC will continue to penalize companies for eco-friendly and “green” marketing claims. The FTC’s consumer guidance states: “Many companies make claims and design packages that promote their products as safe for people or the environment. The law requires these “eco-friendly” or “green” claims to be truthful, and the FTC’s Green Guides tell businesses how to comply with the law when they make environmental claims.” Food and beverage companies making similar packaging claims must closely follow FTC guidance and evaluate claims about packaging and sustainability.
