Kohl’s and Walmart Agree to Pay $5.5 Million in Combined Penalties for Alleged Deceptive Violations of the Textile Act and Rules and FTC Act Around the Use of Bamboo
Today, the Department of Justice, together with the Federal Trade Commission (FTC), announced that Kohl’s Inc. (Kohl’s) and Walmart Inc. (Walmart) have agreed to pay $2.5 million and $3 million in civil penalties, respectively, in as part of settlements to resolve allegations that Kohl’s and Walmart violated the Textile Fiber Products Identification Act (Textile Act) and associated rules (Textile Rules) and the Federal Trade Commission Act (FTC Act) by making deceptive claims about products supposedly made of bamboo.
In complaints filed in the U.S. District Court for the District of Columbia, the government alleged that since 2015, Kohl’s and Walmart violated the Textile Act and Rules and the FTC Act by advertising products as made of bamboo when such products were actually made of rayon and did not contain bamboo fibers. The complaints also alleged that Walmart and Kohl’s made deceptive claims that their products supposedly made of bamboo were environmentally friendly, and that Kohl’s further claimed such products were produced free of harmful chemicals, when in fact rayon is produced using a chemical process that requires toxic chemicals and results in the emission of hazardous pollutants. Kohl’s and Walmart did so even though, in 2010, both had received letters from the FTC warning them that improperly advertising products made of rayon as bamboo violated the Textile Rules and FTC Act.
“Consumers should be able to trust retailers’ representations about the materials from which their clothes and linens are made,” said Deputy Assistant Attorney General Arun G. Rao, head of the Justice Department’s Consumer Protection Branch. “The Department of Justice will not tolerate companies that generate sales by making false claims about their textile products.”
“Kohl’s and Walmart are paying millions of dollars under the FTC’s Penalty Offense Authority for mislabeling their rayon products as bamboo,” said Director Samuel Levine of the FTC’s Bureau of Consumer Protection. “False environmental claims harm both consumers and honest businesses, and companies that greenwash can expect to pay a price.”
The stipulated orders require Kohl’s to pay $2.5 million and Walmart to pay $3 million in civil penalties. The orders also bar Kohl’s and Walmart from making misleading or unsubstantiated claims that products are made of bamboo or provide environmental benefits because they are derived from bamboo. More generally, the orders bar Kohl’s and Walmart from advertising textiles comprised of manufactured fibers in a way that is false or deceptive as to their constituent fibers and requires them to satisfy ongoing recordkeeping, certification and compliance obligations.
This matter is being handled by Trial Attorney Rachael Doud of the Civil Division’s Consumer Protection Branch and Miriam Lederer of the FTC.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit its website at https://www.FTC.gov.