Guest Blog: You’re a Fear Monger!!October 9th, 2012 by DWM Magazine
“That’s what you are!” hissed the architect, wagging his finger at me just before he stomped out of the session I gave on Federal Trade Commission Green Guide implications at the Southern Design Symposium on October 4, 2012. It’s not the first time I’ve been the bearer of unwelcome news and I doubt it will be the last. But I confess I haven’t felt this beat up on a topic since Charlie Everly and Tom Scheg tag-teamed me over energy-efficient impact, IG windows at my first SE AAMA meeting over a decade ago.
What inspired such passionate rage? A maybe not-so-hypothetical situation involving a number of points from the draft Guides to Environmental Marketing and recent FTC agreements that the new guidance left frustratingly vague. Looking across the information sources, coupled with discussions with several FTC staff attorneys and Q&A session with a Federal Trade Commissioner, I’m seeing a ‘chain of information custody’ developing that sounds really scary. Hopefully, readers will be able to follow along this winding trail:
Why did I ask such a blunt question? Shouldn’t I have let well enough alone? A lot of people and businesses will think I should have, but I’m the type of consultant who wants to know the worst so I can help my clients be prepared. I want them to have an escape plan and route before the “fire” ever breaks out. Better yet, I don’t want there to be a “fire” at all. I really don’t enjoy firefighting, damage control or restoration.
Unfortunately, I’m continuing to think that this Guidance, plus the recent cases, really has the potential to make established escape routes totally meaningless: § 260.6 (c) Third-party certification does not eliminate a marketer’s obligation to ensure that it has substantiation for all claims reasonably communicated by the certification.
Like a Russian matroshka doll, the entire construction industry is set up with each individual link in the supply chain (from materials to components to product to construction) responsible for maintaining its own data. We’ve been operating under the pretext that standards, tests, procedures and certifications provide reliable proof without passing along vast quantities of data up into the bigger doll.
Think I’m chasing shadows to drum up business, like the architect did? I would be HAPPY to be off my rocker for the earthquake this would cause. After all, the places we develop the metric mechanisms of standards and certifications meet the criteria previously laid out in the Guides. Industry has spent a lot of time and money to create infrastructure that supports generating reliable data that can consequently be easily communicated. I said as much in my comment to the FTC two years ago.
So my first communication after getting this tweet was an email to Kathleen Carpenter of Luce Forward, who submitted the following excerpt also during the draft comment period in 2010 on behalf of the Leading Builders of America.”
“LBA urges that any final changes made by the FTC to the current Green Guides clarify that homebuilders not be required to independently substantiate certifications and/or energy saving data for each product incorporated into a home. The reason for the requested safe harbor is that imposition of any new requirements may adversely affect a homebuilder’s ability to communicate important energy conservation information to consumers, particularly where the energy conservation data has been provided to homebuilders by the Environmental Protection Agency (EPA) and/or the Department of Energy (DOE).”
I didn’t find the safe harbor Ms. Carpenter had advocated for and that ‘may’ from the Twitter comment just gives me more heebie jeebies. She did say that there does seem to be a bit of a gray area as to the level of substantiation required, and passed along a quote from the new guidelines that addresses whether a business could become an enforcement target when they were relying upon government agency data: “The Commission, however, has never brought an enforcement action against a marketer that legitimately qualifies for an agency’s certification and advertises that certification consistent with the agency’s requirements. The Commission does not want to put marketers in a position of trying to comply with potentially contradictory advice from two federal agencies. To avoid such problems, the Commission actively collaborates with other agencies, such as EPA, Department of Energy and USDA, to address such issues.”
That ought to be comforting to me because I tend to believe that Gorell would not have been named ENERGY STAR Partner of the Year (never mind seven times) if their marketing or technical data and certification weren’t “consistent with the agency’s requirements.” Unfortunately, EPA never responded to my request for comment about Gorell Windows after the FTC announced their agreement, so this is just speculation on my part.
Consequently, I head back to the new section on certification, which again, is nowhere near my liking for our infrastructure.
“§ 260.6 (b) A marketer’s use of the name, logo, or seal of approval of a third-party certifier or organization may be an endorsement, which should meet the criteria for endorsements provided in the FTC’s Endorsement Guides…”
I wouldn’t call certifications in our industry an endorsement, and submitted that comment two year ago too. But there is that pesky word ‘may’ again (we can’t get away with ‘may’ in building codes, can we?). My architect was up in arms over a variant of the following hypothetical situation found in §255.1(d) of the Endorsement Guide.
Example 1: A building contractor states in an advertisement that he uses the advertiser’s exterior house paint because of its remarkable quick-drying properties and durability. This endorsement must comply with the pertinent requirements of Section 255.3 (Expert Endorsements). Subsequently, the advertiser reformulates its paint to enable it to cover exterior surfaces with only one coat. Prior to continued use of the contractor’s endorsement, the advertiser must contact the contractor in order to determine whether the contractor would continue to specify the paint and to subscribe to the views presented previously.
Switch it up a bit – let’s ask why did the contractor use that paint? Because it was specified by the architect, who, for arguments sake, made the selection based on durability tests provided by the paint company. Next, the contractor advertises that the house is designed by Architect Doe and highlights the paint on the list of features in the Parade of Homes book or magazine. Maybe the paint salesman followed up with brochures in the Parade home or model.
Is the architect the expert endorser, which is defined as having “as a result of experience, study, or training, knowledge of a particular subject, knowledge [that] is superior to what ordinary individuals generally acquire”? My hairy eyeball architect certainly did not equate his specification with an advertising endorsement, but the FTC not only looks at explicit claims but also implied ones. So if/when the paint changes, how far down the supply chain does the paint supplier have an obligation to send out information that updates the claims? Some might argue that the paint company doesn’t have an obligation to worry about anyone’s advertising except its own, but the complaint in the Serious agreement gives it a whole new spin: ‘Respondent provided to its independent dealers and installers promotional materials … By doing so, respondent provided them with the means and instrumentalities for the commission of deceptive acts or practices. Therefore, respondent’s provision of such materials to its dealers and installers, constitutes a deceptive act or practice.’
It’s blurry if it applies when jumping between pure ‘marketing’ material and a technical document such as a spec that’s never seen by the consumer. Nevertheless if someone wants to work their way up the supply chain on a non-performance claim, there is an argument in their favor: § 255.0(c) These guides also apply to business-to-business transactions. The guides apply to environmental claims in labeling, advertising, promotional materials, and all other forms of marketing in any medium, whether asserted directly or by implication, through words, symbols, logos, depictions, product brand names, or any other means.
Does the builder even have to advertise the architect’s name or involvement in the creation of the house in order for the architect to still be the expert endorser of the product? Substitute “independent sales rep” for architect, and what could the implications be there?
Am I reaching? Arguably so. My colleague Bert Henderson, who is accredited in public relations, often reminds me that this kind of brainstorming is really important when developing a crisis plan that you hopefully never need. And it’s also arguable that the FTC gave me carte blanche to think out of the box:
So maybe I am fear mongering. I suspect a goodly number of people who actually get to the point in the blog will be thinking the architect was dead on. I sound like Henny “the FTC sky is falling” Penny again. Still, I’d like to think more readers will side with the architect who approached me next. “Ignore him,” said architect two, “he never wants to do anything at all. I’m glad you were here. I don’t like what you said, but I needed to hear it. Now I know what I have to find out about.”
Epilogue: At lunch, Mr. Hairy Eyeball apologized for being so rough on me, in very much the same way Tom Scheg did at SE AAMA. Tom became a valued colleague whose opinion I often sought because I knew we were going to look at things differently. Today, energy-efficient, impact IG windows are mainstream.