Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Down to Earth Designs, Inc. settles FTC charges of deceptive environmental claims, (Jan 21, 2014)

By Linda O’Brien, J.D., LL.M.

The FTC announced on January 17 that Down to Earth Designs, Inc., which does business as gDiapers, has settled FTC charges that it made deceptive claims about its products’ biodegradability, compostability, and other environmentally-friendly attributes. Down to Earth, based in Portland Oregon, markets and sells the gDiapers diaper system, which includes a reusable outer shell (gPants) and disposable pad inner liners (gRefills), as well as baby wipes (gWipes).

According to its complaint (In re Matter of Down to Earth Design, Inc., File No. 122-3268), the FTC charged that the company advertised both gRefills and gWipes as biodegradable and compostable. The company also claimed that gDiapers diapers were plastic-free, and that disposing of gRefills by flushing them down the toilet was environmentally beneficial. The representations include claims that: the products are “100% biodegradable” and “certified” biodegradable; gRefills and gWipes will biodegrade when tossed in the trash; gRefills will biodegrade when flushed; and gRefills offer an environmental benefit because they can be flushed. In fact, gRefills and gWipes are not biodegradable because they do not completely break down and decompose into elements found in nature within one year after customary disposal, which is in the trash.

The complaint alleges that the company has not obtained independent, third-party certification of biodegradability. Diapers did not rely on adequate substantiation for its claims that gRefills and gWipes biodegrade when thrown away in the trash. The complaint also alleges that gRefills do not biodegrade when flushed and that the company did not rely on, and could not substantiate, that gRefills offer an environmental benefit, because they can be flushed.

Additionally, the complaint alleges that gDiapers misled consumers when advertising gRefills and gWipes as compostable at home. According to the complaint, the company failed to adequately disclose that consumers cannot safely home compost gRefills and gWipes soiled with solid human waste – a material limitation. Where gDiapers did disclose that limitation, in many cases the disclosure was not clear and conspicuous. For example, gDiapers made an unqualified home compostable claim on its website’s homepage, only to reveal the limitation on other site pages. gDiapers lacked substantiation for its claim that gWipes are home compostable, according to the complaint.

Finally, the company advertised gDiapers as plastic free, positioning the product as one that would help consumers “end plastic diaper use.” These claims, the complaint alleges, were deceptive, because the gPants component of the gDiapers system contains plastic.

The proposed order to settle the charges prohibits gDiapers from making biodegradable and compostable claims, unless the claims are true, not misleading, substantiated by competent and reliable scientific evidence, and meet specific requirements outlined in the FTC’s revised Green Guides. Additionally, any claims that a disposable diaper or wipe is compostable must clearly and prominently disclose that the product cannot be composted if soiled with solid human waste.

The proposed order also prohibits “free of” certain materials claims, such as plastic, unless the claim is true, not misleading, and substantiated by competent and reliable scientific evidence. It also prohibits specific environmental benefit claims unless the representations are true, not misleading, and sufficiently substantiated. General environmental benefit representations are prohibited unless gDiapers discloses the specific environmental benefit, and each reasonable interpretation of the represented benefit is true and substantiated. gDiapers is also prohibited from making misrepresentations about certifications, including independent third-party certifier evaluations.

“Whether they’re buying diapers or dishwashers, consumers base their purchasing decisions on claims about a product’s attributes,” said Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection. “And the claims for these diapers just didn’t pass our smell test. Consumers can count on the FTC to make sure claims made by marketers are meeting the standards for truthfulness, accuracy, and substantiation.”

The Commission vote to accept the consent agreement packages containing the proposed consent order for public comment was 4-0.

Companies: Down to Earth Designs, Inc.

News: ConsumerProtection FederalTradeCommissionNews