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Amazon to Pay $1.5M for Misleading 'Biodegradable' Label

Amazon agreed to pay $1.5 million to settle a lawsuit that alleged the company misled consumers about "biodegradable" plastic products.

The agreement resolved a complaint by district attorneys from 23 California counties. They said it's misleading to label products "biodegradable" or "compostable" unless scientifically proven.

The settlement is important to environmentalists, but we live in a new world. When Amazon is run by the richest man alive, is $1.5 million really that big of a deal? 

A $1 Trillion World

Amazon is not Apple, which this week became the first $1 trillion business. However, both companies survive on technologies that drive a world economy.

Jeff Bezos, founder of Amazon, started the ecommerce company with a $100,000 loan from his parents. That investment made them billionaires, and now Bezos is worth $143 billion.

According to MarketWatch, Bezos would have to spend $28 million a day to avoid getting richer. In other words, a minus-$1.5 million is not even enough to lower his tax bill.

Of course, the California law doesn't care about that. It bans the sales of plastics labeled biodegradable that don't have disclaimers about how quickly they biodegrade.

Consumers Will Pay

According to reports, environmentally conscious consumers are willing to pay a premium for products that are truly biodegradable. That's because science says plastics can take hundreds of years to decompose.

"Given the increased focus on reducing plastic waste, this judgment will help ensure that customers are not misled about which plastic products will actually break down in the landfill or compost," Napa County Deputy District Attorney Patrick Collins told SFGate.

That, plus another $50,000 Amazon agreed to pay CalRecycle to test plastic products for biodegradability. The $1.5 million goes to pay penalties and investigative costs.

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