Walmart and Kohl’s have both agreed to pay a total of $5.5 million in fines as part of a settlement related to the allegations of misleading advertising.
The Department of Justice announced on Thursday, May 5, that Walmart and Kohl’s paid $3 million and $2.5 million respectively in civil penalties as part of the settlement.
The firms were accused of violating the Federal Trade Commission Act and the Textile Fiber Products Identification Act and its associated laws by making fraudulent statements regarding allegedly bamboo-made products.
The government alleged that Walmart and Kohl’s promoted bamboo-made items when they were really composed of rayon and did not include any bamboo fibers.
Walmart and Kohl’s claimed that their bamboo items were ecologically friendly, and Kohl’s alleged that these products were devoid of dangerous chemicals.
Rayon is manufactured using a chemical process that involves the use of harmful chemicals and the release of pollutants.
The Department of Justice said the companies continued to do so despite receiving letters from the FTC in 2010 warning them that unlawful promotion of rayon goods violated the Textile Rules and the FTC Act.
In addition to the fines, the two firms are prohibited from making false or unsubstantiated claims that their products are made of bamboo or have environmental advantages because they are produced from bamboo.