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There is no doubt that ecofriendly products have an edge in our eco-conscious society. We are drawn to products that make us feel good about buying them. Put simply - green is good for business. Nonetheless, consumers are becoming skeptical of these ecofriendly product claims, prompting environmental and consumer rights groups to take steps to expose misleading claims.
The term "greenwashing" has been coined to refer to the phenomenon of eco-exaggeration. At its heart, greenwashing is the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service. The federal government, state governments, and consumers are taking action to combat those persons and entities that engage in exaggerated marketing of the environmental attributes of products, services, and companies.
The Federal Trade Commission's Green Guides. The Federal Trade Commission (FTC) is revising its "Guides for the Use of Environmental Marketing Claims," more commonly referred to as "Green Guides," a year earlier than planned owing to the rise in consumer complaints about greenwashing. The Green Guides detail what companies that engage in eco-marketing should do in terms of substantiation, specificity, general claims, seals of approval, and eco-seals certification. The Green Guides are the FTC's administrative interpretation of Section 5 of the Federal Trade Commission Act (FTC Act) as applied to environmental marketing. Although the Green Guides do not have the force of law, they provide advertisers with a safe harbor to avoid lawsuits for unfair or deceptive environmental advertising.
State laws. Individuals and companies that engage in greenwashing may also face legal liability under state laws. Many states have enacted so-called baby or little FTC Acts. Florida, for example, has adopted the Florida Deceptive and Unfair Trade Practices Act, which prohibits unfair or deceptive acts or practices in commerce. Additionally, Florida has adopted laws that prohibit all misleading advertisements and allows plaintiffs to recover both attorney fees and punitive damages. Other states, such as California, have adopted strong consumer protection laws that can be used to address greenwashing. California has adopted the Consumers Legal Remedies Act and the Unfair Competition Law. Further, it is likely that plaintiffs could bring common-law claims for greenwashing, including, among others, fraudulent misrepresentation and breach of...