In its 2012 revisions to the Green Guides (16 C.F.R. Part 260) on environmental marketing claims, the FTC declined to provide guidance regarding “organic” claims, “either because the FTC lacks a sufficient basis to provide meaningful guidance or wants to avoid proposing guidance that duplicates or contradicts rules or guidance of other agencies.” That self-imposed silence ended with the FTC’s release of a staff report and study results, “Consumer Perception of ‘Recycled Content’ and ‘Organic’ Claims,” and its announcement of an October 20, 2016 joint FTC/USDA Roundtable, “Consumer Perceptions of ‘Organic’ Claims for Non-Agricultural Products.”
The FTC’s “organic” activities fall squarely within the larger regulatory movement toward providing guidance to businesses and consumers regarding the use of powerfully effective marketing terms such as “natural,” “organic,” “GMO-free,” and “locally grown.” For example, the FDA continues to work on developing a policy for using “natural” in food claims, and states and now the federal government are struggling with labeling requirements for genetically modified organisms (GMO).
The FTC staff report concluded, based on a study of consumer perceptions regarding unqualified and qualified organic claims, that sufficient concern existed about deceptive “organic” marketing claims for the FTC and USDA to convene the October 20 Roundtable “to explore organic claims for non-food products, and how we can work together to reduce deceptive organic claims.” The staff report also concluded that the study results regarding “recycled content” claims did not merit further FTC follow-up or require revision to current Green Guides guidance.
The portion of the study regarding organic claims asked consumers about scenarios involving shampoos, mattresses, and dry cleaning services, all described with unqualified “organic” claims, that included a percentage range of content that was “made by a man-made, chemical process” (0%, less than 1%; 1% to 5%; and 5% to 10%). There was widespread agreement among respondents that the “organic” claim was appropriate for products with no non-organic materials, but a “significant minority of respondents” – the FTC trigger for deceptive claims – believed that an unqualified “organic” claim was not proper if non-organic materials were present in any percentage. That “not organic” result did not change significantly if respondents were advised that the non-organic materials “pose[d] no health or safety hazard to consumers.” FTC staff also concluded from the study – consistent with current Green Guide guidance for general environmental marketing claims – that “qualified claims stating which parts of the product are organic are significantly less likely to mislead consumers than unqualified organic claims,” and, alternatively, that “a percentage qualification may also make the claim less misleading.”
Notwithstanding FTC staff’s concessions of limitations in the study design and the results, the report concludes that the consistency of the results demonstrates the need for follow-up regarding “organic” claims used to market non-agricultural products, including personal care products. Accordingly, the October 20 Roundtable will, among other things, address
- Consumers’ interpretations of “organic” claims for products and services that are not covered by USDA’s Agricultural Marketing Service’s National Organic Program;
- The staff report; and
- Approaches to address potential deception, including consumer education.
The FTC has a dedicated email address for questions and proposals regarding the October 20 Roundtable, email@example.com, and, separately, will be accepting public comments regarding “organic” claims until December 1, 2016.