Guest Blog: Weighing in on FTC DecisionFebruary 23rd, 2012 | Category: Industry News
Yesterday, the Federal Trade Commission announced cases against five window companies in their efforts “to ensure that environmental marketing is truthful and based on solid scientific evidence.” As I read the FTC documents, I realize it’s going to take me far longer than the 24 hours that I’ve had them to completely understand the ramifications of the Commission action. Heck, I think I’ll be lucky if I figure it out in 24 days! With 20-plus documents to digest, plus plenty of questions to follow up on it’s going to take a while. So here are my first impressions:
First off, I’m not particularly surprised. The FTC Green Guides, core concepts of substantiation AND specificity go hand in hand. In many of case examples, specific energy performance was cited but it wasn’t specific enough – the marketing lacked the exact conditions needed to obtain the cited result. Granted, the companies were optimistic about the performance and they said so. But it appears that it wasn’t perceived as optimistic – it was perceived as typical.
My take away? If you’ve got “Up to…” and “conditions may vary” in your current marketing, it might be a good idea to rethink those messages. “If their marketing materials contain these representations, it behooves them to immediately confirm that they aren’t based on exaggerated or unsupported claims about energy efficiency or cost savings,” says Leah Rochwarg, attorney with the Green Marketing Compliance Team at Seyfarth Shaw in Boston. “Such claims should not be misleading. They must be accurate and supported by competent and reliable scientific evidence that all or almost all consumers are likely to achieve the maximum savings claimed.”
Second, I’m completely stunned that Gorell, winner of seven straight ENERGY STAR® Partner of the Year Award, was named. When you think Gorell, you don’t think crappy. In fact, neither does the FTC. “We’re not claiming these are bad windows,” James Kohm, associate director of the enforcement division in the Bureau of Consumer Protection told the Blog of Legal Times. “They just overstated the energy savings.”
My take away? It’s as much about what you say, as HOW you’re saying it. It doesn’t matter how much technical back up you have, if you’re not using it properly and in the right location, it’s like not having it at all.
Third, I’ve long thought that users of the information are also at risk. Long Fence doesn’t manufacture windows – Serious does for them under the Long Window brand. Like the Tested Green case, the Serious complaint alleged that they “caused the dissemination of advertising and promotional materials.” What’s different this time? And what does it mean for builders who use these products?
My take away? Be careful of portraying someone else’s data as your own, unless you can stand behind it. “In this case it was the manufacturers who were making the claims of energy savings. Builders would not be liable for the manufacturer’s claims, unless the builders were restating the claims in their own marketing materials,” says David Crump, director of Legal Research at the National Association of Home Builders in Washington, D.C. “Builders are at risk if they assert the manufacturer’s marketing claim as a claim of their own.”
Lastly, these cases are not settled yet. There is a comment period, open until March 23. I’m not completely sure what comments could be submitted that would change any of these but the opportunity is there.
My take away? There is more information to be gained, more questions to be asked, more to be learned. “The exact impact of these cases on any one company is a very complex legal question,” says Paul Savage, an attorney and LEED AP in Coral Gables. “These cases show that the FTC is serious and active about its enforcement mandate and companies should be monitoring these developments closely and consider carefully the marketing claims that they are making.”
And it still might change. While, possession is 9/10ths of the law, PERCEPTION is apparently really what matters.
Arlene Stewart is president at AZS Consulting Inc., whose new project www.labtoad.com is an information clearinghouse for compliance with green marketing regulations. She will serve as a presenter at Fenestration Day on April 12 in San Antonio, and one of the things she will talk about is what to watch for when it comes to making green claims. For more on her sessions as well as the full seminar line up, visit the website for the event, which is sponsored by DWM magazine.