FTC Agrees to Settlement with Paint Companies Over Charges of Misleading Environmental Claims | Practical Law

FTC Agrees to Settlement with Paint Companies Over Charges of Misleading Environmental Claims | Practical Law

The FTC has agreed to settlements with two paint companies over charges of misleading green marketing claims. These proposed settlements came shortly after the revised Green Guides were released.

FTC Agrees to Settlement with Paint Companies Over Charges of Misleading Environmental Claims

by PLC Commercial
Published on 26 Oct 2012 • USA (National/Federal)
The FTC has agreed to settlements with two paint companies over charges of misleading green marketing claims. These proposed settlements came shortly after the revised Green Guides were released.
On October 25, 2012, the FTC announced that it agreed to settlements with The Sherwin-Williams Company and PPG Architectural Finishes, Inc. over allegations that they violated the FTC Act by making false and unsubstantiated claims that their paints were free of potentially harmful volatile chemicals.
Under the proposed settlements, the companies must stop making the deceptive claim that Dutch Boy Refresh and Pure Performance interior paints, contain "zero" volatile organic compounds (VOCs). While this claim is correct for the uncolored "base" paints, it is not accurate for tinted paint. The tinted paints have higher levels of VOCs and are the paints that consumers usually buy.
Specifically, under the proposed FTC consent orders, which are the same for both companies, the companies must not:
  • Claim that their paints contain "zero VOCs" unless, after tinting, they have a level of zero grams per liter or the companies have competent and reliable scientific evidence that the paint contains no more than "trace" levels of VOCs.
  • Make any VOC claim unless it is true and not misleading and unless the companies have reliable and competent scientific evidence to back it up.
  • Provide anyone, including independent retailers or distributors, with the means of making any prohibited deceptive claims. The companies must also send letters to retailers requiring them to remove all ads for the covered paints that have "zero VOC" claims and put corrective stickers on these containers.
The proposed settlement allows the companies to continue making "zero VOC" claims if they clearly and prominently disclose that the zero VOC claims apply only to the base paint and, depending on the color choice, the VOC level may go up. Where the tinted paint's VOC level rises to 50 grams per liter or more, the company must disclose that the VOC level may increase "significantly" or "up to [the highest possible VOC level after tinting]."
The FTC published its revised Guides for Use of Environmental Marketing Claims (Green Guides) on October 1, 2012, which serve as guidance for marketers on making non-deceptive claims about the environmental attributes of their products. The proposed orders use the definition of "trace amount" of chemicals included in the Green Guides and refer to the rules regulating claims by a company that a product is "free of" certain chemicals or ingredients.
The settlement agreements are subject to public comment through November 26, 2012, after which the FTC will decide whether to make the proposed consent orders final.
The proposed settlements, in addition to the publication of the Green Guides, indicate that the FTC is more closely scrutinizing environmental advertising claims. In addition, some of the promotional materials at issue were directed at retailers, not consumers, showing an expansive take on marketing materials by the FTC.
For more information on the publication of the FTC's revised Green Guides, see Legal Update, FTC Issues Revised Green Guides.