REGULATORY MEMORANDUM

FTC’s Green Guides Apply to Claims Regarding the Environmental Benefits of Simulated and Laboratory-Created Diamonds

In April 2019, the Federal Trade Commission (FTC) sent warning letters to eight companies advertising simulated or laboratory-created diamonds.  In a May 3, 2019, Business Blog item entitled “The many facets of advertising diamonds with clarity,” FTC states that according to the letters, the companies promoted their products without adequately disclosing that they were not mined diamonds.  In the blog item, FTC posed questions to FTC attorney Robert Frisby regarding the best ways to ensure compliance with FTC’s Jewelry Guides.  The questions include what steps companies should take if they want to advertise the environmental benefits of simulated or laboratory-created diamonds.  Frisby notes that the FTC’s Guides for the Use of Environmental Marketing Claims (Green Guides) offer advice on how to make environmental claims non-deceptively and recommends that companies keep two basic principles in mind:

  1.   Advertisers must have a reasonable basis for any environmental benefit claims they make for their products; and
  2.   Advertisers must qualify their claims adequately to avoid deception.

Frisby states that the Green Guides advise advertisers to avoid making unqualified general environmental benefit claims, such as “environmentally friendly,” “because it is highly unlikely the advertiser can substantiate all reasonable interpretations of these claims.”  According to Frisby, the better practice is for advertisers to qualify a general claim by disclosing the specific reasons why the product has environmental benefits.  Frisby notes that Section 260.4 of the Green Guides features examples of claims that are “appropriately qualified under the circumstances.”  More information on the Green Guides, which were updated in 2012, is available in our October 3, 2012, memorandum, “FTC Releases Revised Green Guides.”

 
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