The Federal Trade Commission has cracked down on some retailers for falsely advertising some products.
Walmart and Kohl’s have agreed to pay $2.5 million and $3 million in civil penalties, respectively, in light of allegations that the retailers misled consumers by falsely marketing some products as bamboo. The FTC filed a suit in April against the two retailers in the District of Columbia, claiming that Kohl’s and Walmart “falsely” marketed dozens of rayon textile products as bamboo.”
The FTC, which aims to protect and inform consumers, also alleged that both companies made “deceptive environmental claims” by marketing that their bamboo textiles were made via eco-friendly processes, which is rarely the case when it comes to converting bamboo into rayon.
“Kohl’s and Walmart are paying millions of dollars under the FTC’s Penalty Offense Authority for mislabeling their rayon products as bamboo,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a release. “False environmental claims harm both consumers and honest businesses, and companies that greenwash can expect to pay a price.”
In the initial complaints, the FTC highlighted that certain products at Walmart and Kohl’s such as sheets, towels and blankets that claim to be made from bamboo and eco-friendly are actually made from rayon, a man-made fiber that requires toxic chemicals in its conversion process. Advertising the products as bamboo-based without disclosing the actual fiber names violates the Textile Act and Rules, which requires such details to prevent against falsely advertised products.
To address the violations, the FTC proposed that Kohl’s and Walmart stop falsely advertising products as bamboo or eco-friendly and pay $2.5 million and $3 million, respectively, in civil penalties.
A Kohl’s spokesperson in April said the company reached a settlement with the FTC and continues to “take these regulations seriously.”
When asked for a comment on the initial complaint, Walmart said it was “pleased” to be able to work with the FTC to resolve these issues.
“We are committed to being the most trusted retailer and take these claims seriously,” a company spokesperson said. “We hold ourselves accountable when issues like this are raised. We have worked to strengthen our product description programs and expect our suppliers to provide products that comply with all laws, including those around labeling.”
Walmart is also currently tied up in a lawsuit with Vans, regarding the sale of certain shoes. A federal judge last week blocked Walmart from continuing to sell certain shoes that are “confusingly similar” to Vans’ registered trademarks and protectable trade dress during the duration of the litigation between both parties. The opinion represents the use of a preliminary injunction, which is meant to help prevent a party in a lawsuit from suffering irreparable harm if no injunction is issued during litigation.
Walmart has also filed a lawsuit against its big-box rival BJ’s Wholesale, alleging that it stole the self-checkout technology it uses in its Sam’s Club wholesale warehouse chain.