Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Misleading claims by marketers of LED bulbs prohibited under final judgment, (Feb 20, 2014)

By Linda O’Brien, J.D., LL.M.

The FTC announced today that, at the its request, a federal court has ordered a light bulb manufacturer and its owners to pay more than $21 million for misleading consumers by exaggerating the performance of their Light Emitting Diode (LED) light bulbs (FTC v. Lights of America, Inc., FTC File No. 092-3145, Civil Action No. SACV10-1333 JVS (MLGx)).

In September 2010, the FTC filed a complaint, charging Lights of America, Inc,, Usman Vakil, and Faroog Vakil with violating federal law by overstating the light output and life expectancy of their LED bulbs on packages and in brochures, and falsely comparing the brightness of their LED bulbs with that of other light bulbs.

Following a trial in October 2012, the court entered findings of the defendants’ false and deceptive claims. Prior to trial, the court had already found that the defendants made unsupported claims that their LED bulbs provided the same or comparable light output as incandescent bulbs.

According to the FTC, the defendants initially claimed their LED lamps had a 30,000-hour life and lasted “15 times longer than 2,000 hour incandescent bulbs.” The defendants revised those claims downward several times, including a statement that their LED lamps had a 12,000-hour life and lasted “6 times longer than 2,000 hour incandescent bulbs.” But in fact, the documents and data the defendants relied upon showed that none of their LED bulbs that were tested lasted beyond a few thousand hours.

In September 2013, the court found that the defendants were liable for deceptive marketing. The court order requires the defendants to pay $21 million to the FTC, which represents the total amount consumers paid to the company for light bulbs based on the deceptive claims. Most of the money will be available for refunds to consumers. The court order permanently prohibits the defendants from misrepresenting material facts about lighting products, and misrepresenting light output or brightness in lumens, light output equivalency to another product, lifetime of the product, energy costs, energy savings, or energy consumption, or the ability to produce a desired energy-related effect. The order also requires the defendants to meet certain compliance and record-keeping requirements for 20 years.

The final judgment was entered by the U.S. District Court for the Central District of California, Southern Division, on January 15, 2014.

Companies: Lights of America, Inc.

News: ConsumerProtection FederalTradeCommissionNews