Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Paint Sellers Agree to Settle FTC Claims That They Misled Consumers About Harmful Chemical Content, (Oct 25, 2012)

By E. Darius Sturmer, J.D.

Two of the nation’s leading paint companies, The Sherwin-Williams Company and PPG Architectural Finishes, Inc. have agreed to settle FTC charges that they misled consumers to believe that some of their paints are free of potentially harmful chemicals known as volatile organic compounds (VOCs).

In administrative complaints filed against Sherwin-Williams and PPG, the agency charged that the companies violated the FTC Act by making false and unsubstantiated claims in advertising that their Dutch Boy Refresh and Pure Performance interior paints, respectively, contain “zero VOCs” after tinting. According to the agency, while this may be true for the uncolored “base” paints, it is not true for tinted paint, which typically has much higher levels of the compounds, and which consumers usually buy.

According to the FTC, consumers likely reasonably interpret the companies’ “zero-VOC” claims as applying to the final product—tinted paint, which is made by adding color to a base paint to produce the final color the customer desires; and that they understand the claims to mean that the paint has no VOCs or only a “trace amount” of VOCs. The FTC claims that in many instances, both Sherwin-Williams’s Dutch Boy Refresh and PPG’s Pure Performance paints contain more than trace levels of VOCs after the base paint is tinted. The complaints also charge the companies with distributing promotional materials that provided independent retailers with the means to deceptively advertise that the companies’ paints contain zero VOCs.

Under separate proposed FTC consent orders, both Sherwin-Williams and PPG would be required to stop making the allegedly deceptive claims. The proposed consent orders prohibit the companies from claiming that their paints contain “zero VOCs,” unless, after tinting, they have a VOC level of zero grams per liter, or the companies have competent and reliable scientific evidence that the paint contains no more than trace levels of VOCs. The definition of “trace” comes from the “trace amount” test included in the FTC’s recently released updated Green Guides for environmental marketing claims.

Alternately, the proposed orders would allow the companies to clearly and prominently disclose that the “zero VOC” claims apply only to the base paint, and that depending on the consumer’s color choice, the VOC level may rise. In cases where the tinted paint’s VOC level could be 50 grams per liter or more, the proposed orders require the companies to disclose that the VOC level may increase “significantly” or “up to [the highest possible VOC level after tinting].” In addition, the proposed orders would prohibit the companies from making any VOC claim or other environmental claim unless it is true and not misleading, and unless the companies have competent scientific evidence to back it up.

Finally, the proposed orders would prohibit both Sherwin-Williams and PPG from providing anyone, including independent retailers or distributors, with the means of making any of the prohibited deceptive claims. The orders also would require the companies to send letters to retailers requiring them to remove all ads for the covered paints that have “zero VOC” claims and putting corrective stickers on current paint cans making these claims.

Lewis M. Rose (Kelley Drye & Warren LLP) for The Sherwin-Williams Company. John P. Feldman (Reed Smith LLP) for PPG Architectural Finishes, Inc.

News: ConsumerProtection FederalTradeCommission