82 FR 32823 - YOLO Colorhouse, LLC; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

Federal Register Volume 82, Issue 136 (July 18, 2017)

The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices. The attached Analysis to Aid Public Comment describes both the allegations in the complaint and the terms of the consent order-- embodied in the consent agreement--that would settle these allegations.

[Federal Register Volume 82, Number 136 (Tuesday, July 18, 2017)]
[Notices]
[Pages 32823-32825]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-14973]


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FEDERAL TRADE COMMISSION

[File No. 162 3082]


YOLO Colorhouse, LLC; Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

[[Page 32824]]


ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices. The attached Analysis to Aid Public Comment describes both 
the allegations in the complaint and the terms of the consent order--
embodied in the consent agreement--that would settle these allegations.

DATES: Comments must be received on or before August 10, 2017.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write: ``In the Matter of YOLO 
Colorhouse, LLC, File No. 162-3082'' on your comment, and file your 
comment online at https://ftcpublic.commentworks.com/ftc/yolocolorhouseconsent by following the instructions on the web-based 
form. If you prefer to file your comment on paper, write ``In the 
Matter of YOLO Colorhouse, LLC, File No. 162-3082'' on your comment and 
on the envelope, and mail your comment to the following address: 
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania 
Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, 
Suite 5610 (Annex D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Katherine E. Johnson (202-326-2185), 
Bureau of Consumer Protection, 600 Pennsylvania Avenue NW., Washington, 
DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing a consent order to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of thirty (30) days. The 
following Analysis to Aid Public Comment describes the terms of the 
consent agreement, and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement package can be obtained 
from the FTC Home Page (for July 11, 2017), on the World Wide Web, at 
https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before August 10, 2017. 
Write ``In the Matter of YOLO Colorhouse, LLC, File No. 162-3082'' on 
your comment. Your comment--including your name and your state--will be 
placed on the public record of this proceeding, including, to the 
extent practicable, on the public Commission Web site, at https://www.ftc.gov/policy/public-comments.
    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/yolocolorhouseconsent by following the instructions on the web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
    If you prefer to file your comment on paper, write ``In the Matter 
of YOLO Colorhouse, LLC, File No. 162-3082'' on your comment and on the 
envelope, and mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite 
CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex 
D), Washington, DC 20024. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Because your comment will be placed on the publicly accessible FTC 
Web site at https://www.ftc.gov, you are solely responsible for making 
sure that your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else's Social 
Security number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. You are also 
solely responsible for making sure that your comment does not include 
any sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 
16 CFR 4.10(a)(2)--including in particular competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular, 
the written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request, and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(c). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on the public FTC Web site--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from the FTC Web site, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC Web site at http://www.ftc.gov to read this Notice 
and the news release describing it. The FTC Act and other laws that the 
Commission administers permit the collection of public comments to 
consider and use in this proceeding, as appropriate. The Commission 
will consider all timely and responsive public comments that it 
receives on or before August 10, 2017. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Agreement Containing Consent Order To Aid Public Comment

    The Federal Trade Commission (``FTC'' or ``Commission'') has 
accepted, subject to final approval, an agreement containing a consent 
order from YOLO Colorhouse, LLC, a limited liability company 
(``respondent'').
    The proposed consent order has been placed on the public record for 
thirty (30) days for receipt of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) days, the Commission will again review the 
agreement and the comments received, and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
order.
    This matter involves respondent's marketing, sale, and distribution 
of

[[Page 32825]]

purportedly ``VOC-free'' paints. ``VOC'' is the abbreviation for 
volatile organic compounds. VOC-free includes claims such as ``zero 
VOCs,'' ``0 VOCs,'' and ``No VOCs.'' According to the FTC complaint, 
respondent made unsubstantiated representations that its paints: (1) 
Are VOC-free; (2) are VOC-free during or immediately after painting; 
(3) will not emit any chemical or substance, including VOCs, that 
causes material harm to consumers, including sensitive populations such 
as children; and (4) will not emit any chemical or substance, including 
VOCs, during or immediately after painting, that causes material harm 
to consumers, including sensitive populations such as children. The FTC 
further alleges that respondent provided independent retailers with 
promotional materials containing the same claims it made to consumers. 
Thus, the complaint alleges that respondent engaged in deceptive 
practices in violation of Section 5(a) of the FTC Act.
    The proposed consent order contains three provisions designed to 
prevent respondent from engaging in similar acts and practices in the 
future. Part I prohibits emission-free and VOC-free claims unless both 
content and emissions are actually zero or at trace levels. The orders 
define ``emission'' to include all emissions (not just VOCs that cause 
smog). This definition reflects the Commission's Enforcement Policy 
Statement and consumer expectations: consumers are likely concerned 
about the potential health effects from exposure to chemical emissions 
found in indoor air, not just VOCs that affect outdoor air quality. The 
order defines ``trace level of emission'' to mean (1) no intentionally 
added VOC, (2) emission of the covered product does not cause material 
harm that consumers typically associate with emission, including harm 
to the environment or human health, and (3) emission of the covered 
product does not result in more than harmless concentrations of and 
compound higher than would be found under normal conditions in the 
typical residential home without interior architectural coating. Part 
II prohibits misleading representations regarding emission, VOC levels, 
odor, and any general environmental and health benefit of paints. The 
order requires competent and reliable scientific evidence to 
substantiate these representations. Part IV prohibits respondent from 
providing third parties with the means and instrumentalities to make 
false, unsubstantiated, or otherwise misleading representations of 
material fact regarding paints, including any representation prohibited 
by Parts I or II.
    To correct existing unsubstantiated zero emission and VOC claims, 
Part III requires the respondent to send letters to its dealers and 
distributors, instructing them to put stickers on paint cans to obscure 
allegedly unsubstantiated emission and VOC claims.
    Parts V through IX are reporting and compliance provisions. Part V 
mandates that respondent acknowledge receipt of the order, distribute 
the order to certain employees and agents, and secure acknowledgments 
from recipients of the order. Part VI requires that respondent submit 
compliance reports to the FTC within sixty (60) days of the order's 
issuance and submit additional reports when certain events occur. Part 
VII requires that respondent must create and retain certain records for 
five (5) years. Part VIII provides for the FTC's continued compliance 
monitoring of respondent's activity during the order's effective dates. 
Part IX is a provision ``sunsetting'' the order after twenty (20) 
years, with certain exceptions.
    If the Commission finalizes the agreement's proposed order, it 
plans to propose harmonizing with this order the consent orders issued 
in the PPG Architectural Finishes, Inc. (Docket No. C-4385) and The 
Sherwin-Williams Company (Docket No. C-4386) matters. Specifically, the 
Commission plans to issue orders to show cause why those matters should 
not be modified pursuant to Section 3.72(b) of the Commission Rules of 
Practice, 16 CFR 3.72(b).
    The purpose of the analysis is to aid public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the proposed order or to modify its terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2017-14973 Filed 7-17-17; 8:45 am]
 BILLING CODE 6750-01-P