Brussels – Whereas more than half of the EU consumer population is found to be receptive to green claims, only one-fifth appears to actually trust the sustainability claims made by brands. More and more, the market is realizing that “sustainability” is more than a buzzword and green claims should be substantiated by clear and transparent data. The reputation and trustworthiness of the brand can be at stake. Continue Reading ESG in fashion (2) : the EU framework on greenwashing in the fashion industry
Tuesday, November 2, 2021
Deceptive or Misleading Conduct & Consumer Protection
- The FTC recently issued full refunds totaling over $2 million to consumers who lost money through certain deceptive direct mail schemes. The agency recovered the refunds via a federal district court order resulting from the FTC’s lawsuit against Agora Financial, LLC, NewMarket Health, and other defendants. The lawsuit was based upon two publications defendants marketed to older consumers. One publication contained a protocol promising to permanently cure type 2 diabetes in 28 days, while the other promised to show how to claim money from a secret giveaway by Congress. The FTC obtained the order including consumer refunds before the Supreme Court stripped the agency of its ability to obtain equitable monetary relief in federal court in the April 22, 2021 AMG Capital decision. Congress has not yet acted on the FTC’s request to reinstate this power.
On November 4, 2021, the Occupational Safety and Health Administration (“OSHA”) released its much-anticipated COVID-19 Vaccination and Testing Emergency Temporary Standard (“ETS”) requiring employers with 100 or more employees to ensure that their employees are either vaccinated by January 4, 2022, or submit to weekly testing. According to OSHA, employees who are unvaccinated face a “grave danger” from COVID-19, including the more contagious Delta variant. The ETS notes that COVID-19 is highly transmissible—particularly in workplaces where multiple people interact throughout the day often for extended periods of time—and exposure to COVID-19 can result in death or illness, with some individuals experiencing long-term health complications. OSHA has determined that vaccination is the most effective way to protect these employees. Continue Reading OSHA Publishes Vaccine Requirements for Employers with 100 or More Employees
In one of the most significant developments in product safety law over the past decade, Gree Electric Appliances Inc. of Zhuhai, Hong Kong Gree Electric Appliances Sales Co. Ltd., and Gree USA Inc. (the “Gree Companies”), an appliance manufacturer and two of its subsidiaries, have pled guilty to willfully failing to report to the Consumer Product Safety Commission (CPSC) under Section 15(b) of the Consumer Product Safety Act (CPSA). According to the U.S. Department of Justice (DOJ) and the CPSC, the Gree Companies knew their dehumidifiers were defective, failed to meet applicable safety standards, and could catch fire, but failed to timely report that information to the CPSC. Section 19 of the CPSA makes it unlawful to fail to furnish information required by Section 15(b), and such failures are subject to both civil and criminal penalties. While CPSC civil penalties have become fairly routine—the Gree Companies also paid a then-record $15.45 million civil penalty in 2016—this is the first corporate criminal enforcement action brought under the CPSA, according to the DOJ. Continue Reading Silence Isn’t Golden: Failure to Report Consumer Product Safety Issues Results in Rare $91 Million Criminal Penalty
Supply chain issues are a top concern for many companies across industries and markets. Please join Crowell & Moring for a webinar series that explores these issues and provides insights on the various legal and tactical considerations as companies think about supply chain disruption, impacts, and solutions.
Overview of Supply Chain
Wednesday, November 17 at 1:00 pm EST
This session provides an overview of the myriad issues affecting and arising from the global and national supply chain delays and port congestion. Crowell & Moring’s experienced practitioners will cover issues pertaining to international trade/global mobility, government contracts, criminal and civil regulatory compliance and enforcement, cybersecurity, torts, commercial contracts and negotiations, antitrust, and around the corner litigation.
Speakers: Bryan Brewer, Caroline Brown, Rebecca Chaney, Addie Cliffe, Alexis DeBernardis, Lex Eley, Cheri Falvey, Lyndsay Gorton, Kate Growley, Michael Gruden, Derek Hahn, Toni Jackson, Michelle Linderman, Nicole Simonian, Carolyn Wagner, Megan Wolf, Evan Wolff, Tiffany Wynn, and Yuan Zhou.
Government Contract Issues
Wednesday, December 8 at 1:00 pm EST
In the second installment of Crowell & Moring’s webinar series, our Government Contracts attorneys will discuss the impacts of the current and expected supply chain issues on federal government contractors and their compliance responsibilities. Our panelists will discuss contract clauses that may be at risk as the supply chain delays continue, including requirements for domestic preferences, prohibitions on counterfeit parts, and protecting national security interests. This panel will also cover the expected Government enforcement of supply chain-related compliance violations, including False Claims Act liability.
Speakers: Addie Cliffe, Lyndsay Gorton, and Yuan Zhou
Click here to register!
Monday, October 25, 2021
Bureau of Competition and FTC Operations
- The FTC issued a policy statement restoring its pre-1995 practice of requiring parties under a merger consent decree to obtain the Commission’s permission before pursuing additional acquisitions in that market. This “Prior Approval” policy is designed to protect consumers and deter “clearly anticompetitive” deals, per Holly Vedova, the Director of the Bureau of Competition. The FTC will consider a number of factors when deciding whether to permit a deal, including (1) the nature of the transaction, (2) the level of market concentration and the degree to which the transaction increases market concentration, (3) the degree of pre-merger market power, (4) the parties’ history of acquisitiveness, and (5) evidence of anticompetitive market dynamics. The Commission approved the statement by a vote of 3-2; the Commissioners voting against the policy subsequently issued a dissenting statement.
Here’s a brief review of key developments concerning the U.S. Consumer Product Safety Commission (“CPSC”) from the past month to help you stay aware of important product safety legislative and regulatory happenings.
Gree Appliance Companies Plead Guilty to Felony Charge for Failure to Report; Indicted Executives Await Trial. In one of the most significant developments in product safety law over the past decade, Gree Electric Appliances Inc. of China, Hong Kong Gree Electric Appliances Sales Co. Ltd., and Gree USA Inc. (the “Gree Companies”), a global appliance manufacturer, have pleaded guilty to willfully failing to report to the CPSC under Section 15(b) of the Consumer Product Safety Act. According to the DOJ and CPSC, the Gree Companies knew their dehumidifiers were defective, failed to meet applicable safety standards, and could catch fire, but failed to report that information to the CPSC for months. Section 19 of the CPSA makes it unlawful to fail to furnish information required by Section 15(b), and that failure is subject to civil and criminal penalties. While CPSC civil penalties (or at least investigations) have become fairly routine—indeed, the Gree Companies paid a then-record $15.45 million civil penalty in 2016—this is the first corporate criminal enforcement action brought under the CPSA by the Government. As part of the Gree Companies’ plea agreement, they will pay a $91 million penalty. Two Gree executives have been charged criminally by the DOJ as well, and await trial, scheduled for March 2022. Stay tuned for a full analysis from the Crowell product safety team. Continue Reading CPSC Insights – October 2021
On November 2, 2021, Crowell & Moring attorneys Judith Bussé, Ryan MacFarlane, Nicole Janigian Simonia, and David Stepp will be presenting a webinar to address the top 5 ESG challenges and opportunities for international companies and organizations.
Climate change is a global challenge that demands a global response. Global standards are vital in a number of areas to tackle the cross-border problems that many organizations face from forced labor issues, global initiatives, and disclosure requirements to greenwashing. Among the pressing issues are how plastic packaging and waste is regulated on a global level, how the recent EU initiatives apply to companies established outside of the EU territory, x, and x. Level-setting will need to go beyond what environmental, social and governance (ESG) basics address and so called “green” or sustainable investments that claim to pursue environmental goals will begin to see more scrutiny. Governments around the globe are working on numerous voluntary standards and a wave of new ESG regulation calls for more extensive and detailed corporate disclosures including that ESG risks are appropriately managed by third parties, such as supply chains and other business relationships. Continue Reading Webinar: Top 5 ESG Challenges and Opportunities for International Companies and Organizations
Recalls in Review: A monthly spotlight on the trending regulatory enforcement issues at the CPSC.
As businesses brace for anticipated supply chain delays in the coming months, many stores are already offering impressive deals to early holiday shoppers. Recognizing that numerous popular products contain magnets, we turn our attention to CPSC regulatory actions involving magnets in this month’s installment of “Recalls in Review.”
At least 58 recalls involving magnets have been conducted since 1998, with 56 of those recalls occurring after 2005. The CPSC began monitoring magnets, magnet sets, and products containing magnets very closely in 2007, recalling eleven products amid reports that children were swallowing magnets and experiencing severe internal injuries. Similar recalls continued into 2008 and were accompanied by an increase in recalls of magnets for violations of the federal lead paint standard.
Unlike many other consumer products, no mandatory federal safety standard exists specifically to regulate magnets or magnet sets. The CPSC attempted to promulgate a mandatory federal safety standard to address high-powered magnets and published the regulation on October 3, 2014. Under the rule, magnets intended for use as part of a magnet set and that fit the CPSC’s definition of a “small part” could not have a flux index above the specified level. However, the rule was ultimately vacated by a federal court and removed from the Code of Federal Regulations. Still, the CPSC continues to monitor and recall high-powered magnets. The CPSC first sued Zen Magnets LLC in 2012 over their high-powered “Zen Magnets Rare Earth Magnet Balls” to force a recall of the products after discussions with the company failed to result in a voluntary recall plan. The Zen Magnets recall was finally announced in August 2021.
On October 25, 2021, the FTC announced that it will seek to impose prior approval provisions on merging parties in all future consent decrees. These provisions will require parties to merger consent decrees to request formal Commission approval before closing any future transactions in the same market, and potentially adjacent markets, regardless of whether those subsequent transactions are reportable under the HSR Act. This shift reinstates a policy abandoned by the FTC in 1995, and seeks to provide the Commission the unilateral ability to block future transactions it views as problematic, without having to carry the legal burden in court. Continue Reading FTC Plans to Impose Prior Approval Requirements for Future Transactions