The Federal Trade Commission settled with online appliance retailers P.C. Richard & Son, Abt Electronics, and Pinnacle Marketing Group over charges that the companies failed to post EnergyGuide information on their Web sites to inform consumers about the energy use of the major home appliances they sold. The defendants – which also operate brick-and-mortar stores – agreed to pay more than $400,000 in total penalties.
The cases were the first the agency has brought against online retailers for Appliance Labeling Rule violations. Under the Appliance Labeling Rule, appliance retailers are required to provide EnergyGuide information for certain products, including refrigerators, freezers, dishwashers, air conditioners, water heaters and washing machines. The yellow-and-black label informs consumers about the key features of the appliance, the estimated annual cost to operate the appliance, the estimated annual electricity use, and the cost range of other appliance models with similar features.
In a statement, David Vladeck, the Director of the FTC’s Bureau of Consumer Protection, emphasized that the Labeling Rule applies not just to physical stores, but to online retailers. “Companies selling appliances covered by the FTC’s rule, either online or in stores, have an obligation to provide EnergyGuide labels,” he noted.
For knowingly violating the law, P.C. Richard & Son agreed to pay $180,000; Abt Electronics, Inc., will pay $137,500; and Pinnacle Marketing Group will pay $100,000. The FTC also notified two other online retailers – Universal Computers and Electronics and Universal Appliances, Kitchens, and Baths – that it intends to seek an additional $640,000 from them for similar charges. The companies have not yet agreed to settle.
To read the complaints and consent decrees in the cases, click here.
Why it matters: The FTC’s enforcement action exemplifies the agency’s recent focus on environmental claims and marketing issues, especially in light of the proposed revisions to the Green Guides. In addition, the FTC recently announced that it will extend the Appliance Labeling Rule to televisions manufactured after May 10, 2011, requiring retailers and manufacturers to use the EnergyGuide label to inform consumers about different models and how much energy they use.