Markets Wired

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

The two companies agreed to settlements with the FTC requiring them to stop making the allegedly deceptive claim that their Dutch Boy Refresh and Pure Performance interior paints, respectively, contain “zero” volatile organic compounds.  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.

VOCs are carbon-containing compounds that easily evaporate at room temperatures.  Some VOCs can be harmful to human health and the environment.  Historically interior paints, which are the subject of the FTC’s cases against Sherwin-Williams and PPG, have contained significant levels of VOCs.

“Environmental claims, like the VOC-free claims in this case, are very difficult, if not impossible, for consumers to confirm,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection.  “That’s why it’s so important for the FTC to give clear guidance to marketers, like the Commission’s recently revised Green Guides, and to police the market to ensure that consumers actually get what they pay for.”

The Sherwin-Williams Company is headquartered in Cleveland.  With annual sales of $7.8 billion, it is the largest coatings manufacturer in the United States and the third-largest in the world.  It markets and sells product under the Sherwin-Williams, Dutch Boy, Krylon, Minwax, and Thompson’s WaterSeal brands.

PPG Architectural Finishes, Inc. (PPG) is headquartered in Pittsburgh, Pennsylvania.  A subsidiary of PPG Industries, Inc., it does business under its own name, as well as under the names PPG, Pittsburgh Paints, Porter Paints, Pure Performance Paints and Olympic stain.

The FTC’s administrative complaints against Sherwin-Williams and PPG charge the companies with violating the FTC Act by making false and unsubstantiated claims that that their paints contain “zero VOCs” after tinting.

Sherwin-Williams and PPG make their “zero-VOC” claims through a variety of media, including brochures, point-of-purchase marketing, product labels, and the Internet.  Some of these materials are disseminated to independent distributors.  The FTC contends that 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.

According to the FTC, however, 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.

The proposed consent orders settling the FTC’s charges are the same for both Sherwin-Williams and PPG.  First, they 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 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 orders 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 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.

Information for Consumers and Business

According to the recently revised Green Guides to environmental marketing, which the FTC issued earlier this month, companies sometimes claim that their products are “free of” a chemical or other ingredient that may be an environmental concern.  When marketers say a product is “free of” an ingredient, the product must not contain the ingredient or have only a trace amount.  The “trace amount” test is met if:  1) the level of the ingredient is less than that which would be found as an acknowledged trace contaminant or background level; 2) the ingredient’s presence does not cause material harm that consumers typically associate with it; and 3) the ingredient has not been added intentionally. 

The FTC has a new consumer education publication called “Before You Buy Paint” that specifically addresses “free of” claims as related to paint products. Other information about shopping green can be found on the FTC’s website, including a post on the agency’s Business Blog page.

The Commission votes to accept the consent agreement packages containing the proposed consent orders for public comment were 5-0.  The FTC will publish a description of the consent agreement packages in the Federal Register shortly.  The agreements will be subject to public comment for 30 days, beginning today and continuing through November 26, 2012, after which the Commission will decide whether to make the proposed consent orders final. 

Interested parties can submit written comments electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.

Comments in paper form should be mailed or delivered to:  Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580.  The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest.  The complaint is not a finding or ruling that the respondent has actually violated the law.  A consent order is for settlement purposes only and does not constitute an admission by the respondent that the law has been violated.  When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions.  Each violation of such an order may result in a civil penalty of up to $16,000.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

(FTC File Nos. 112-3198, Sherwin-Williams; 1123160, PPG)