On April 8, 2022, Kohl’s and Walmart were fined for violating federal marketing laws, resulting from a Federal Trade Commission (“FTC”) investigation alleging that the businesses had: 1) falsely marketed dozens of rayon textile products as being made of bamboo; and 2) misleadingly claimed that such “bamboo-derived” textiles were made using ecofriendly processes. In reality, the process of converting bamboo into rayon requires the use of toxic chemicals and creates hazardous pollutants. Pursuant to the Federal Trade Commission Act (“FTC Act”), and the FTC’s Penalty Offense Authority, Kohl’s and Walmart were ordered to stop making deceptive green marketing claims and to pay penalties, totaling $5.5 million.
The underlying allegations against Kohl’s and Walmart should serve as a cautionary tale to those in the marketing industry. Specifically, if businesses want to promote their products as ecofriendly, they may face serious penalties if those claims turn out to be false.
Marketing Law Violations and the FTC
Pursuant to the FTC Act, the FTC is authorized to investigate false advertising and deceptive practices for the purpose of preventing businesses from misleading the consuming public. According to the FTC Act, false advertising occurs when businesses make misleading, deceptive, or plainly false claims about a particular product or service. Claims may be misleading if they imply something that is untrue (e.g., product materials) or leave out relevant information....
A front-page article with the byline of veteran New York Times opinion writer Nicholas Kristof is the latest poisonous example of what I call the NGO “halo effect.” Headlined “The Silence That Mee...