On November 1, 2010, the Federal Trade Commission (FTC) announced that three online retailers have agreed to pay a total of $417,500 in civil fines for failing to provide Energy Guide information on their websites in violation of the Appliance Labeling Rule. The three retailers are Abt Electronics, Pinnacle Marketing Group, and P.C. Richard & Son. In addition, two additional retailers–Universal Computers and Electronics and Universal Appliances, Kitchens and Baths–were informed by the FTC that it believes they violated the Rule and should be assessed $640,000 in civil penalties. Energy Guide data inform consumers about the energy use of home appliances and enable side-by-side comparisons of similar models.
These cases are the first brought by FTC against online retailers for violation of the Rule. The Rule requires retailers, whether they are online or maintain physical outlets, to provide Energy Guide information for common home appliances such as refrigerators, freezers, dishwashers, air conditioners, water heaters, and washing machines. The information included in Energy Guide estimates the annual cost of operating the appliance.
The Energy Policy and Conservation Act (EPCA) authorizes the FTC to assess civil penalties for knowing violations of the Rule. However, before the agency may do so, it must notify the non-settling companies of the proposed penalty amounts. Once notified, the companies can choose to pay the proposed penalty and settle the case or litigate the matter in an FTC administrative proceeding.
FTC staff alleged that the retailers’ web pages for each covered product are “catalogs” as defined in the Rule and that they advertise products covered by the Rule. Because the companies failed to include the required information disclosures, FTC staff charged that these retailers violated the Rule.