| July 7, 1998 Secretary
Dear Secretary: The North American Insulation Manufacturers Association ("NAIMA") presents these comments on the Federal Trade Commission’s ("FTC") proposal to issue a policy statement regarding the applicability of its rules and guides to newer forms of electronic media, such as E-mail, CD-ROMs, and the Internet. 63 Federal Register 24,996 (May 6, 1998). NAIMA is a trade association of North American manufacturers of fiber glass, slag wool, and rock wool insulation products. NAIMA’s role is to promote energy efficiency and environmental preservation through the use of fiber glass, slag wool, and rock wool products and to encourage safe production and use of insulation products. Because some of the competitors of NAIMA members employ deceptive and misleading advertising on the Internet, NAIMA is keenly interested in the FTC’s formulation of a policy statement on the applicability of the Commission’s rules and regulations on such forms of electronic communication as the Internet. The Internet has become a treasure trove of information for both consumers and businesses. With over 50 million people accessing the Internet on a regular basis, the ability of a single advertisement to reach a diverse audience with limited cost to the advertiser has dramatically increased. Some of those advertisements, however, seem to assume that the Internet is similar to the wild west, where law and conformity to rule was unnecessary. For example, certain cellulose insulation manufacturers target homeowners by promoting their product as a non-toxic, non-hazardous, environmentally friendly alternative to fiber glass insulation. The Occupational Safety and Health Administration and their state equivalents in California and Michigan have determined that cellulose insulation is a toxic or hazardous material, and therefore, claims of a non-toxic or non-hazardous affect are false. While the erroneous claims of being non-toxic and non-hazardous mirror the deceptive advertising techniques employed by cellulose manufacturers in the print media, the Internet enables these manufacturers to more successfully reach home-owning consumers. Hence, consumers are subjected to promotional material previously pitched to a largely commercial audience. Consumer’s exposure to such material alone necessitates the implementation of a FTC Policy on advertising in electronic media. The essence of fair advertising is 1) the lack of deception; 2) fairness of any and all representations; and 3) the requirement that claims must be substantiated. This same standard must be applicable to advertising on the Internet or this burgeoning commercial medium will simply become a snare for the gullible and uneducated. To preserve consumer’s confidence in the Internet, NAIMA believes that the FTC needs to implement a policy that outlines its jurisdiction over electronic media advertising. If consumers do not have redress for deceptive or misrepresentative claims made through electronic media, the FTC will have failed to uphold its statutory mandate. This means that the Policy Statement should advise those promoting goods or services via electronic media that deceptive and misleading advertising could result in penalties or corrective action. NAIMA specifically encourages the FTC to plainly set forth the applicability of the Commission’s Guides for the Use of Environmental Marketing Claims to the Internet. Assertion of environmental friendliness or marketing a product as "green" is particularly appealing to consumers. NAIMA has found flagrant violation of the FTC’s environmental marketing guides by some cellulose insulation manufacturers who claim that their product is 100 percent recycled content. While cellulose insulation producers make these same claims in the print media, the Internet allows these manufacturers to target home owning consumers with such propaganda. Therefore, NAIMA believes that applicability of the Environmental Marketing Guides, among other FTC rules and guides, to all electronic media is crucial to protecting the public against confusing and misleading claims. The Commission also contemplates convening a public workshop to discuss the issues raised in its Federal Register notice. While such a workshop could be very beneficial, should the Commission hold such a workshop NAIMA, asks that a wide cross section of interests be represented in the process. NAIMA confirms its support for the Commission’s statutory mission of preventing deceptive and misleading advertising and endorses the FTC’s efforts to extend that responsibility to the emerging field of electronic media. Sincerely, Angus E. Crane |