Marketing and Comms
First FTC “Green Guides” Settlement Reinforces Need for Transparency, Truth in Marketing

On Wednesday, the Federal Trade Commission (FTC) approved a final order settling charges that The Sherwin-Williams Co. and PPG Architectural Finishes, LLC made false and unsubstantiated claims that some of their paints contained zero volatile organic compounds (“VOCs”) after tinting. The case is the first to apply the FTC’s recently revised “Green Guides” and, while it deals with some unique properties associated with the marketing of the paints in question, it provides useful guidance for anyone making environmental marketing claims, particularly “free-of” claims.

VOCs are carbon-containing compounds that evaporate at room temperature. Some can be harmful to human health and the environment. Historically, many interior paints have contained VOCs. The companies subject to the order marketed certain paints as containing “zero” VOCs. However, while this statement was true for uncolored “base” paints, it was not true of the paints once they were tinted, and most consumers only purchase tinted paints. The FTC found that marketing the paints as containing zero VOCs was deceptive because this was not a true statement with regard to how the paints were typically used.

Section 260.9 of the Green Guides provide guidance regarding “free-of” claims. It provides that a product can be labeled as “free-of” a substance, even if the substances is present in the product, if:

1. the level of the specified substance is no more than that which would be found as an acknowledged trace contaminant or background level;
2. the substance’s presence does not cause material harm that consumers typically associated with that substance;
3. the substances has not been added intentionally to the product.

However, footnote 4 of 260.9 notes that what constitutes a trace contaminant or background level depends on the substance at issue and requires a case-by-case analysis.

With regard to paints, the FTC’s view was that in assessing “VOC-free” claims, consumers are concerned with the impacts on both health and the environment after the paint is applied. Therefore, what is important is whether the paints are “VOC-free” when used. The FTC noted that it was not aware of any scientific or regulatory body that has recognized a specific trace contaminant level of VOCs in paint. Therefore, the question was whether the levels of VOCs exceeded background levels when applied. Because the levels allegedly did exceed background, the FTC asserted that the “VOC-free” claim was deceptive.

Initially, one can argue that the order is limited in its application because of the unique situation involving these paints; most marketers do not sell products that must be modified by adding another product in order for the product to be used. But the settlement has implications for marketers of all kinds of products — how the FTC applied the Green Guides in this case can be of assistance in determining how the agency might approach other marketing claims.

First, the FTC reiterated that its primary concern is how the consumer views the claim. In this case, the FTC noted that consumers likely viewed the “VOC-free” claim in the context of the potential harm posed to health and the environment when actually applied. This is a reminder that marketers must be very careful when making a claim not only to insure that the claim is true, but to evaluate how the consumer is likely to perceive the claim and make sure that the claim is true based on the consumer’s understanding as well as the conditions and circumstances under which the product is likely to be used.

Second, the FTC specifically noted that it was not aware of any “scientific or regulatory body that has recognized a specific trace contaminant level of VOCs in paint.” This is a reminder that the FTC’s view is that all claims involving health, safety or product efficacy must be verifiable and supported by competent and reliable scientific evidence.