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FTC Cracking Down on Misleading, Unsubstantiated Biodegradability Claims

The Federal Trade Commission recently announced enforcement actions against six companies — five of which address biodegradable plastic claims for the first time — as part of the agency’s ongoing crackdown on false and misleading environmental claims.The cases include a complaint against a biofilms company that claims its additive makes its plastic products biodegradable, as well as four complaints and proposed consent orders against companies marketing various plastics with allegedly false and unsupported biodegradability claims. The civil penalty case involves a complaint and consent order against a company that has since violated a 1994 FTC order prohibiting it from making unsupported “green” claims for its paper plates and bags.

By Jennifer Elks | Published 11 years ago | About a 4 minute read

The cases include a complaint against a biofilms company that claims its additive makes its plastic products biodegradable, as well as four complaints and proposed consent orders against companies marketing various plastics with allegedly false and unsupported biodegradability claims. The civil penalty case involves a complaint and consent order against a company that has since violated a 1994 FTC order prohibiting it from making unsupported “green” claims for its paper plates and bags.

These cases are part of the FTC’s efforts to ensure compliance with the agency’s recently revised Green Guides, which the Commission publishes to help businesses market their products accurately, providing guidance as to what constitutes deceptive and non-deceptive environmental claims.

“It’s no secret that consumers want products that are environmentally friendly, and that companies are trying to meet that need,” said Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection. “But companies that don’t have evidence to support the environmental claims they make about their products erode consumer confidence and undermine those companies that are playing by the rules.”

ECM Biofilms, Inc., based in Ohio, markets its additives that allegedly make plastic products biodegradable under the trade name MasterBatch Pellets. ECM claimed that “plastic products made with [its] additives will break down in approximately nine months to five years in nearly all landfills or wherever else they may end up.” The complaint alleges that these purportedly biodegradable plastics do not in fact biodegrade within a reasonably short period of time after disposal in a landfill. Moreover, the complaint alleges that ECM issues its own “Certificates of Biodegradability of Plastic Products” – which ECM allegedly uses to convince its customers of its products’ biodegradability – when the company cannot substantiate its claims.

The FTC is also charging that American Plastic Manufacturing, CHAMP, Clear Choice Housewares, Inc. and Carnie Cap, Inc. are misrepresenting that plastics treated with additives are biodegradable, biodegradable in a landfill, biodegradable in a certain timeframe, or that various scientific tests prove their biodegradability claims. The proposed consent orders prohibit the four companies from making biodegradability claims unless they are true and supported by competent and reliable scientific evidence. As stated in the Green Guides, the companies must have evidence that the entire plastic product will completely decompose into elements found in nature within one year after customary disposal (defined as disposal in a landfill, incinerator, or recycling facility) before making any unqualified biodegradable claim.

The FTC is charging that the sixth company, paper-product manufacturer AJM Packaging Corporation, has violated a July 19, 1994, Commission consent order that barred it from claiming that any product or package is degradable, biodegradable, or photodegradable unless it had reliable scientific evidence to support the claims. Despite the terms of the order, AJM began making new environmental claims for a number of its papers products, including claims that they were “biodegradable,” “compostable” or both. The packaging for AJM’s paper plates also prominently state that they are “recyclable.”

In settling the FTC’s complaint, AJM has agreed to pay a $450,000 penalty, vacate the prior Commission order and enter into a new order that reflect new language used in the updated Green Guides. The updated order bars AJM from making unsubstantiated claims that a product or package is biodegradable, compostable, recyclable, or offers an environmental benefit and requires AJM to disclose information needed to qualify these claims to avoid deception.

On August 14, SB hosted a webinar called “Avoiding Anguish: Tips & Tricks for Steering Clear of False Advertising Allegations,” which the six companies above apparently didn’t attend. It outlined the most common allegations; guidelines for accurately representing your product's environmental or health benefits as determined by the Green Guides; and tips on how to avoid falling prey to the litigation feeding frenzy.

False claims aside, navigating the sea of eco-labels and disposability options for various products can be challenging. In an effort to mitigate consumer confusion and help maintain the integrity of recyclable materials streams, three laws proposed in North Carolina and Alabama would require containers made from biodegradable or compostable plastic to be labeled “non-recyclable.”

Filed in March, the proposed laws would prevent any plastic containers sold or distributed in those states from being labeled compostable, biodegradable or degradable unless the container is also clearly marked "not recyclable, do not recycle." Alabama’s proposed law would also require containers to comply with the Green Guides before claiming to be compostable, biodegradable or degradable. If passed, the laws would go into effect on July 1, 2014.