Businesses Beware: FTC Looks To Put “Green” Marketing Claims Under The Microscope

Morrison & Foerster LLP

The U.S. Federal Trade Commission (FTC) has announced its highly anticipated proposed revisions to its Environmental Marketing Guides. When final, the FTC guidance will establish significant new rules of the road for companies that advertise the environmental attributes of their products, services, or business practices. Companies currently making any environmental marketing claims to consumers, whether through traditional advertising, web sites, or social media, need to pay careful attention to the FTC’s existing and newly-proposed guidance if they wish to avoid the prospect of enforcement action or related consumer litigation.

Informally known as the “Green Guides,” the FTC’s Environmental Marketing Guides provide guidance on how Section 5 of the FTC Act and similar state laws – all of which prohibit deceptive or misleading marketing acts or practices – are likely to be enforced with respect to environmental advertising claims. Noncompliance with the Green Guides has also been used as the basis of consumer class actions and claims initiated by competitors under the federal Lanham Act. Moreover, the National Advertising Division of the Better Business Bureau (the NAD), a self-regulatory organization that resolves disputes between competitors and has the authority to initiate its own challenges, operates an active enforcement program in the area of green advertising. Like the FTC and state regulators, the NAD looks to the Green Guides when evaluating green advertising claims.

Among other things, the proposed Green Guides significantly tighten the FTC’s guidelines for: (1) “general” environmental benefit claims (e.g., “environmentally friendly,”), (2) use of environmental certifications and seals of approval, and (3) degradability of products or their packaging (e.g., “compostable”).

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Morrison & Foerster LLP

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