Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Retailers to pay $1.3M in penalties for mislabeling rayon products as “bamboo”, (Dec 9, 2015)
Organizations Mentioned:Bed Bath & Beyond, Inc. | JCPenny | Nordstrom, Inc.
By Michael Menzhuber, J.D., LL.M.
Under court orders settling charges by the FTC that they mislabeled and advertised rayon textiles as made of bamboo, four national retailers are barred from continuing to make such claims and are required to pay civil penalties totaling $1.3 million, the Commission announced today.
Pursuant to the court orders, Bed Bath & Beyond Inc. will pay $500,000; Nordstrom, Inc. will pay $360,000; J.C. Penney Company, Inc. will pay $290,000; and Backcountry.com LLC will pay $150,000 for allegedly violating the Textile Act, the Textile Rules, and Section 5 of the FTC Act by falsely and deceptively selling the mislabeled products, despite knowing that doing so was illegal and could subject them to civil penalties.
The FTC complaints allege that the four companies continued to misrepresent or mislabel rayon products as “bamboo” despite receiving warning letters from the FTC in 2010 and a synopsis of previous litigated cases against marketers for deceptively labeling rayon products as bamboo. Specifically, the FTC charged that:
Bed Bath & Beyond ’s mislabeled items, also sold through its subsidiary buybuy BABY, included dozens of “bamboo” textiles, including “Aden + Anais Bamboo 3-Pack Muslin Swaddles” and “Bamboo Blend Napkins.”
Nordstrom sold similar products online and in its stores, including a “Gypsy 05 Bamboo Racerback Hi-Lo Dress” and “Degree Six Clothing The Bamboo Long Sleeve Tee.”
J.C. Penney sold numerous “bamboo” products in its stores and online, including “Muk Luks 4-pk Men’s Bamboo Socks,” and falsely claimed “bamboo” gave the products antimicrobial properties.
Backcountry.com sold “bamboo” textiles, such as “Bridgedale Bamboo Crew Sock – Men’s” and also made anti-microbial claims for its “bamboo” products.
Additionally, the proposed orders settling the FTC’s charges prohibit the companies from violating the FTC’s Textile Act and Rules by failing to properly identify the fiber content when labeling and advertising any textiles containing manufactured fibers. The complaints and proposed orders were filed in U.S. District Court for the District of Columbia.
News: Advertising ConsumerProtection FederalTradeCommissionNews