Regulatory Developments

FTC Announces Settlements with Kohl’s and Walmart for “Bogus Bamboo Marketing”

April 14, 2022

The Federal Trade Commission (FTC) announced on April 8, 2022, that it used its Penalty Offense Authority to take action against Kohl’s and Walmart “for falsely marketing dozens of rayon textile products as bamboo.” FTC also charged both companies with making deceptive environmental claims, “touting that the ‘bamboo’ textiles were made using ecofriendly processes, while in reality converting bamboo into rayon requires the use of toxic chemicals and results in hazardous pollutants.” According to FTC, it asked the U.S. District Court for the District of Columbia to order Kohl’s and Walmart to stop making deceptive green claims or using other misleading advertising, and pay penalties of $2.5 million and $3 million, respectively, “by far the largest penalties in this area.”
 
FTC states that its complaints against Kohl’s and Walmart are similar in their structure and allegations. According to the complaints, since at least January 2015, Kohl’s and Walmart have each marketed at least two dozen items as made of bamboo in both product titles and descriptions. In addition, the companies have marketed some of the “bamboo-derived” products as providing general environment benefits, such as being produced “free of harmful chemicals, using clean, non-toxic materials.” The proposed orders settling the FTC’s complaints prohibit the companies from conduct alleged in the complaint. The companies must:

  • Shut down bogus bamboo marketing claims: Stop claiming that a textile product is made of bamboo or bamboo fiber, unless they can substantiate it;
     
  • Stop making unsubstantiated green marketing claims: For products made of bamboo or bamboo fiber, stop claiming that it is produced free of harmful chemicals, using non-toxic materials, or in a way that is safe for the environment or non-polluting, or has any other environmental benefits because it is derived from bamboo, unless they can substantiate it;
     
  • Stop Textile Rule violations: Stop violating the FTC’s Textile Act and Rules by deceptively advertising textile contents; and
     
  • Pay $5.5 million in penalties: Kohl’s and Walmart must pay civil penalties of $2.5 million and $3 million, respectively, under the FTC’s Penalty Offense Authority.

 
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