Online retailer Overstock.com has agreed to pay $27,000 in civil penalties after a consumer protection complaint alleged the company violated California law by using misleading labels claiming plastic products were biodegradable or compostable.
The complaint was filed by 24 District Attorney’s Offices in California, including Fresno County.
The state Legislature in 2004 enacted statutes that limit the sales of plastics marketed as biodegradable in recognition that plastics break down at different rates, depending on the environment. The lack of oxygen in landfills can keep plastic from biodegrading, for example.
As a result, biodegradable claims are “inherently misleading to consumers,” the Fresno County District Attorney’s Office said in a news release Wednesday.
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The settlement prohibits Overstock from offering or selling plastic products labeled as “biodegradable,” “degradable” or “decomposable.”
The company is also prohibited from offering or selling plastic products labeled as “compostable” unless it has met scientific certification that the products can be composted.
Additionally, Overstock made changes to its website to comply with state law without admitting liability.
The civil penalties represent only a fraction of the company’s net worth. In the second quarter of 2017 ending on June 30, the company’s reported revenue was $432 million.