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Online Retailers Fail to Disclose Required Energy Efficiency Information, Groups Contend

FTC action sought on alleged failures by Newegg, BJ’s Wholesale Club to label appliances as required by law
November 15, 2011
Washington, D.C. —

Earthjustice, on behalf of its client Public Citizen, yesterday called on the Federal Trade Commission to initiate enforcement action and levy fines against two online retailers for violations of energy efficiency labeling rules alleged in a letter to the FTC.

FTC’s Appliance Labeling Rule requires online retailers to display energy efficiency information—including information about operating costs—on listings of most household appliances. The Earthjustice letter contends that online retailers Newegg and BJ’s Wholesale Club continue to violate this law more than two months after Earthjustice sent the companies letters detailing listings that failed to provide this information.

“It’s illegal to sell a consumer an appliance covered by the rule without telling them how much it will cost to use that appliance,” said Jon Wiener, Earthjustice attorney. “Online retailers have no excuse for failing to provide essential energy efficiency information to consumers.”

Violations of the rule are subject to fines of $110 per violation per day. The letter alleges 76 violations by Newegg and 25 by BJ’s. In the last year, FTC has fined four retailers a combined $640,000 for failure to comply.

Retailers can comply with the labeling rule by either linking to a product’s black-and-yellow Energy Guide or, for products other than televisions, by providing an estimate of the electricity cost an average consumer would have to pay to use the product for a year and an explanation of how it was calculated. Other retailers that have received letters from Earthjustice have added energy efficiency information to thousands of appliance listings.

By one estimate, Newegg is the 12th largest online retailer in the country, with revenue placing it between Best Buy and Netflix. BJ’s is estimated to rank 247 among online retailers and 62 among retailers of major appliances.

This is the second time in the last two months that Earthjustice has lodged a formal complaint with the FTC alleging failures by online retailers to disclose energy efficiency information. In September, Earthjustice sent a letter to FTC alleging noncompliance by Target Corporation with the labeling rules. FTC has yet to take action on that letter.

Earthjustice recently collected more than 10,000 signatures in support of its petition to FTC asking the agency to make changes to the rule that would require retailers to more prominently display the Energy Guide label for all appliances.

Contacts

Raviya Ismail, Earthjustice, (202) 745-5221

About Earthjustice

Earthjustice is the premier nonprofit environmental law organization. We wield the power of law and the strength of partnership to protect people’s health, to preserve magnificent places and wildlife, to advance clean energy, and to combat climate change. We are here because the earth needs a good lawyer.