Kohl's, Walmart to pay $5.5M for alleged violations of Textile Act, FTC Act

The Department of Justice, together with the Federal Trade Commission, announced that Kohl's (KSS) and Walmart (WMT) 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 and associated rules and the Federal Trade Commission 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. 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 record-keeping, certification and compliance obligations. Reference Link