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A Greener Future: A Study of New Policies To Limit Greenwashing

In Consumer Products

Mahi Mallina

ENGL 138T: Rhetoric and Civic Life II

Professor Babcock

17 April 2023
1

Introduction

By communicating the value and importance of products through attention-grabbing

campaigns, marketing has played an influential role for centuries in getting consumers to buy

companies’ products. But, what happens when the marketing becomes environmentally

deceitful? Greenwashing is the practice by which companies market a product to look more

environmentally-friendly than it actually is. Historically, the term was first invented in a 1986

essay by American environmentalist James Westerveld that was written to note the irony of hotel

guests in Fiji being asked to reuse towels when the hotel’s expansion destroyed the local

environment.1 Since then, the phrase has been used to describe the countless number of

companies publicly and misleadingly flaunting their products’ greenness in order to capitalize on

the demand for environmentally friendly products. With the threat of environmental damage

becoming an increasingly pressing issue, it is imperative that both citizens and government

officials in the United States consider new targeted solutions to navigate greenwashing.

How Does Greenwashing Work?

Greenwashing can be done in many ways, but according to the environmental marketing

consulting firm TerraChoice, it usually falls under seven criteria known as the “7 Sins of

Greenwashing.” One of the sins include making claims that cannot be verified based on the

information given to consumers (no proof).2 For instance, companies can claim cosmetics to be

paraben-free in order to convey the product is “natural” despite having other harmful synthetic or

artificial ingredients.3

1
David Markham, Anshuman Khare, and Terry Beckman, “Greenwashing: A Proposal to Restrict Its
Spread,” Journal of Environmental Assessment Policy and Management 16, no. 04 (2014): 1,
https://doi.org/10.1142/s1464333214500306.
2
Ibid
3
Ibid
2

Figure 1. The 7 Sins of Greenwashing (Yiping Zhang)4

However, the most prominent form of greenwashing occurs in promoting the actual

product. Nowadays, many products use vague “buzzwords” to draw consumers’ attention;

whereas the word “organic” is regulated by the USDA and FDA, other synonyms such as clean,

natural, and sustainable are unregulated and can be used even without clear concrete evidence of

being beneficial for the environment.5 In the eyes of a consumer, all the words could seem the

same, but it could actually mean the stark difference between helping or hurting the planet.

Greenwashed promotion might also mean strategically designing packaging based on color

psychology or making false/misleading claims about their products.

4
Yiping Zhang, “Beware of Greenwashing in Finance,” Impakter, August 28, 2019,
https://impakter.com/beware-of-greenwashing-finance/.
5
Ecocult, “What’s the Difference between Green, Sustainable, Eco-Friendly, Ethical, Fair Trade, Clean,
Organic, Non-Toxic, and Conscious? - Ecocult,” Ecocult, May 8, 2018,
https://ecocult.com/whats-the-difference-between-green-sustainable-eco-friendly-ethical-fair-trade-clean-o
rganic-non-toxic-and-conscious/.
3

Greenwashed marketing works by making it seem like consumers need the product to

support the environment, causing them to become ignorant of the actual evidence. When looking

at labels, consumers may tend to look more at whether the packaging is recyclable and if it has

any prominent environmental stamps than the actual ingredients and fine print. Design also plays

a role. The colors green and blue, images of nature and specific buzz words discussed above

work together to conjure an image of sustainability and being “good” for the environment.

Figure 2. Survey by Cone Communication in 2011 (Leon Walker)6

Psychologically, people will often turn a blind eye to the specifics of so-called green

products in order to feel better about themselves and their environmental impact.7 In economic

theory, due to the increased usage of “sustainability–related claims,” people are easily convinced

due to their familiarity in everyday life and forget to consider the evidence behind said claims.8
6
Leon Walker, “Consumers Don’t Trust Green Product Claims, Survey Says,” Environment + Energy
Leader, March 28, 2012,
https://www.environmentalleader.com/2012/03/consumers-dont-trust-green-product-claims-survey-says/.
7
Leonie A. Venhoeven, Jan Willem Bolderdijk, and Linda Steg, “Why Acting Environmentally-Friendly
Feels Good: Exploring the Role of Self-Image,” Frontiers in Psychology 7 (November 24, 2016): 1846,
https://doi.org/10.3389/fpsyg.2016.01846.
8
Christian Robledo, “Discussion of Existing Environmental Marketing Regulations and the Need for
Stricter Legislation,” Touro Law Review 38, no. 3 (2022): 937–67,
https://digitalcommons.tourolaw.edu/lawreview/vol38/iss3/8.
4

As greenwashing becomes commonplace in society, it has become increasingly difficult for

vulnerable consumers to make environmentally sound decisions having seen psychologically

persuasive marketing.

In addition to deceiving consumers, greenwashing has other drawbacks. Not only is it

illegal and highly unethical in the United States, but it can also ruin the company’s reputation if

they are found to be exaggerating their sustainability. For instance, studies have also shown that

greenwashers typically see an average of a 1.34% drop in the American Customer Satisfaction

Index (ACSI), which is tied to reduced returns on investment and market prices for shares.9 This

drop could ultimately lead to weaker business performance and competitiveness; with more and

more companies greenwashing, this could also cause catastrophic economic downfalls for the

nation as a whole. More importantly, their false claims and inaction can actually contribute more

to environmental damage than what the public perceives. But why does this matter?

Urgency of Environmental Implications

The last decade has seen notable changes in technology, media and more importantly, the

environment. Recent years have brought on many challenges with finding a balance between

meeting the needs of an ever increasing population and saving the planet from irreparable

damage.

The production lifecycle is likely one of the largest contributors of environmental harm

thanks to the harsh ingredients and manufacturing/transportation processes used to meet the

needs of billions of people every year. Consumer products often include many toxic chemicals

9
Rachel Koning Beals, “Here’s How Much ‘Greenwashing’ Can Shave from Company Earnings,”
MarketWatch, 2022,
https://www.marketwatch.com/story/heres-how-much-greenwashing-can-shave-from-company-earnings-1
1658778585.
5

and plastic-based packages that when discarded irresponsibly, could contaminate freshwater

sources and the surrounding land. According to the United Nations (UN), there are up to 51

trillion microplastic particles in the ocean from cosmetics or broken-down pieces of packaging.10

This pollution can cause digestive tract issues and poisoning in marine life as well as humans,

leading to detrimental health complications, disrupted food chains, and even premature death.

The misuse of the environment has consequences, many of which have everyday effects

now and in the future. The production and transportation of products produce significant

amounts of carbon dioxide emissions— more than 2 gigatons of CO2 a year!— that could

increase “global temperature by as much as 4.4°C by the end of the century,” droughts, food

shortages, and housing displacements; without action, climate change may become irreversible

as early as 2030.11 Furthermore, the pollution caused by plastic waste and emissions can also

make it harder to breathe and destroy agricultural crops, significantly impacting the way of life.

Figure 3. How climate change will affect Earth (Nature Climate Change)12
10
United Nations, “Climate Action Fast Facts,” United Nations (United Nations, 2020),
https://www.un.org/en/climatechange/science/key-findings.
11
Ibid
12
Brian C. O’Neill et al., “IPCC Reasons for Concern Regarding Climate Change Risks,” Nature Climate
Change 7, no. 1 (January 2017): 28–37, https://doi.org/10.1038/nclimate3179.
6

Despite greenwashing having a long history, it has recently become a bigger issue,

especially with the looming fear of climate change hanging over the world population. Currently,

there are very limited regulations in the US as it is a murky category of marketing and is

becoming harder to discern. As consumers become more interested in sustainability to do their

part for the environment, greenwashing has become more prevalent in the consumer industry;

some popular examples include L’Oreal, Proctor & Gamble, and Nestle. A study done by The

Harris Poll found that more than 72% of surveyed global corporations based in the US engaged

in greenwash; 58% believe their organizations exaggerated their sustainability efforts and

minimized the actual size of their environmental footprint.13 One example would be when

Volkswagen marketed their diesel vehicles to be low-emission when in actuality, they were

emitting “up to 40 times the allowed limit for nitrogen oxide pollutants.”14 In other words,

companies mislead consumers with “green” products, diverting attention away from real

solutions to environmental problems. All of this evidence points to the fact it is up to the

government and individual consumers to reduce the effects of greenwashing and hold companies

accountable for their production lifecycles.

Current Solutions & Constraints

Currently, greenwashing is being tackled both with government regulation and public

advocacy. Whereas the regulation looks to provide information to and penalize companies,

public advocacy is more focused on giving individual consumers the information they need to

not fall prey to aggressive sustainability marketing. Looking at the United States as a nation, the

13
Justin Keeble, “New Survey Reveals Executives’ Views about Sustainability,” Google Cloud Blog, 2022,
https://cloud.google.com/blog/topics/sustainability/new-survey-reveals-executives-views-about-sustainabil
ity.
14
Rachel Koning Beals, “Here’s How Much ‘Greenwashing’ Can Shave from Company Earnings”
7

federal government has two pieces of legislation to limit greenwashing: section 5 of the Federal

Trade Commission Act (FTCA) and the Lanham Act.

Section 5 of the FTCA lays the groundwork for taking legal action to limit greenwashing

by targeting violating companies directly. Despite not mentioning greenwashing specifically, the

section does prohibit a wider range of ‘‘unfair or deceptive acts or practices in or affecting

commerce.”15 Essentially, the Federal Trade Commision (FTC) has the power to enforce

consumer protection laws if and when it finds any violations through the various processes

provided by the US government. While the FTC is able to amend existing statutes/rules and

make new ones too, they will usually file complaints against companies they believe violated a

law.16 The company can then either choose to sign a consent agreement to settle the charges or

contest it in front of an administrative law judge, which could then lead to a dismissal or cease

and desist.17 Judicially, the FTC can also obtain civil penalties for consumer injury or additional

violations of cease and desist orders in district courts without initially going through the

administrative process.18 This is often a more effective avenue for action when a company’s

claims directly pose a problem to consumer welfare. One notable example is when complaints

were filed against Kohl’s and Walmart in the U.S. District Court for making false claims that

certain products were made from bamboo when they actually contained rayon and other harmful

chemicals.19 This approach is often preferable as it results in immediate injunctions and monetary

15
Federal Trade Commission, “A Brief Overview of the Federal Trade Commission’s Investigative, Law
Enforcement, and Rulemaking Authority,” Federal Trade Commission, June 7, 2013,
https://www.ftc.gov/about-ftc/mission/enforcement-authority.
16
Ibid
17
Christian Robledo, “Discussion of Existing Environmental Marketing Regulations and the Need for
Stricter Legislation,” 952
18
Ibid
19
Lesley Fair, “$5.5 Million Total FTC Settlements with Kohl’s and Walmart Challenge ‘Bamboo’ and Eco
Claims, Shed Light on Penalty Offense Enforcement,” Federal Trade Commission, April 8, 2022,
https://www.ftc.gov/business-guidance/blog
8

compensation. The two major corporations paid $5.5 million collectively to resolve the

greenwashing lawsuit.20

In addition to legal action, the FTC focuses on educating marketers and companies on the

criteria of claims considered to be greenwashing. The agency is responsible for overlooking the

Green Guides, which are a collection of principles first issued in 1992 and continuously revised

to provide companies with guidance on ensuring their environmental claims are not deceitful and

are substantiated.21 Although the Green Guides are not federally regulated and hence, not

enforceable, the FTC can take action based on Section 5a if they find a company in violation of

the guidelines.

On the other hand, the Lanham Act, officially known as the Trademark Act of 1946,

gives private companies, rather than the government, the power to fight greenwashing. Although

it has many purposes in the fight against trademark violations, Lanham Act has become

significant in greenwashing as it allows companies to hold their competitors liable for

advertising false or deceptive claims to gain an unfair advantage in the market. Through civil

courts, the party at fault can be met with injunctive relief and be forced to pay settlements for the

plaintiff's lost profits.22

Overall, both the FTCA and Lanham Act give the government and companies the

authority to fight against greenwashing, however the outcome of invoking them in court is

severely limited. The regulations do not provide specific guidelines on environmental claims;

rather, they focus on the idea of deceptive and unfair marketing as a whole. In other words,

20
Lesley Fair, “$5.5 Million Total FTC Settlements with Kohl’s and Walmart Challenge ‘Bamboo’ and Eco
Claims, Shed Light on Penalty Offense Enforcement”
21
Christian Robledo, “Discussion of Existing Environmental Marketing Regulations and the Need for
Stricter Legislation,” 953.
22
Legal Information Institute, “15 U.S. Code § 1125 - False Designations of Origin, False Descriptions,
and Dilution Forbidden,” LII / Legal Information Institute, n.d.,
https://www.law.cornell.edu/uscode/text/15/1125.
9

current federal actions are constrained by the fact that they provide little guidance on the

complex and ever-changing nature of greenwashing. The Green Guides are vague on what

environmental claims are actually deceptive and with limited revisions (the last being in 2012),

FTC enforcement has been minimal with fewer complaints being filed in recent years.

Figure 4. Environmental marketing cases brought by the FTC (Latham & Watkins)23

The regulations become even more ambiguous when it comes to more complex claims.

For instance, if a complex technical or scientific term is used, it is not grounds for a case as it has

“no meaning” to the regular consumer and therefore, not technically false in their eyes.24

Moreover, lawsuits and claims cannot be filed by consumers and therefore, the current solutions

do very little in protecting consumers. In the case of Made in the USA Foundation v. Phillips

Foods Inc, Phillips Foods filed a motion to dismiss the case, which succeeded, as consumers did

23
Latham & Watkins, “Anticipated Changes to FTC Green Guides Portend New Areas of Potential
Litigation,” Environment, Land & Resources, February 6, 2023,
https://www.globalelr.com/2023/02/anticipated-changes-to-ftc-green-guides-portend-new-areas-of-potenti
al-litigation/.
24
Ashley Lorance, “An Assessment of U.S. Responses to Greenwashing and Proposals to Improve
Enforcement,” Hofstra Law Student Works 3 (2010): 14.
10

not have the capability to sue under the Lanham Act.25 Even though it is attempting to act with

the consumers’ best interests in mind by disputing claims that affect them, the federal

government does not entirely acknowledge that consumers are also stakeholders in the issue.

Therefore, it makes it harder for them to stand up for themselves and make more meaningful

product choices to help the environment.

To address the deficiencies in federal regulation, many organizations have created

overwatch groups to provide consumers with helpful information on how to avoid green

marketing scams. Greenwashing Index was created from a collaboration between University of

Oregon professors and Enviromedia Social Marketing in 2007.26 The platform allows users to

submit ads, rate the respective company based on how accurate their claims are, and provide

support on what products should be avoided based on their environmental footprint. According

to Kim Sheehan, one of the co-founders, the public uses the information to “cut through the PR

spin” and gain more “honest” knowledge.27 Similarly, other platforms such as Green Story and

Provenance work to make technical data more user-friendly and up to date and highlight where

brands fall in terms of sustainability, both environmentally and humanely.28 These user-generated

resources offer critical information to people who are finding it increasingly difficult to identify a

company’s real motivations.

Some individual companies have also reacted to the difficulties of finding real sustainable

products with certifications and labels in order to establish trust with their consumers. After

meeting performance criteria set by government agencies, non-profits or private entities,

25
Ashley Lorance, “An Assessment of U.S. Responses to Greenwashing and Proposals to Improve
Enforcement,” 12.
26
Kim Sheehan and Benedetta Brevini, “An Interview with Kim Sheehan: Greenwashing in the Experience
of the Greenwashing Index,” Carbon Capitalism and Communication, 2017, 111,
https://doi.org/10.1007/978-3-319-57876-7_9.
27
Kim Sheehan and Benedetta Brevini, “An Interview with Kim Sheehan: Greenwashing in the Experience
of the Greenwashing Index,” 113.
28
Ibid
11

companies have the ability to voluntarily add specific certifications labels.29 These labels focus

on certifying not only specific issues such as energy or chemical use, but also the entire life cycle

of the product. Popular examples include GreenSeal and EnergyStar. Since they are substantiated

by credible, independently-verified evidence, the labels give consumers the ability to make

informed decisions not solely based on a company’s marketing strategies. They also provide a

clear indication of environmentally-friendliness at first glance. However, too many eco-labels

may also diminish effectiveness and make it even more confusing for consumers to discern

greenwashing. Another disadvantage is that there could be fees for testing and receiving the

label, which may discourage smaller companies from applying to be certified.30

Future: New and Improved Solutions

With climate change a pressing issue and the ever-increasing instances of climate change,

it is imperative that action be taken to limit greenwashing. As discussed above, the United States

does not currently have any policies in place that specifically target green marketing. Therefore

there will be two types of recommendations in this section: revising existing legislation and

implementing new solutions.

Although there is a framework for federal legal action, there is room for improvement in

terms of expanding the enforcement of the FTCA and Lanham Act. Since they are constrained by

vague advice, the first step would be to amend the Green Guides to create stricter and clearer

guidelines for writing environmental claims; less ambiguity could provide more guidance and

give the FTC more concrete evidence of violations for complaints. The guides are revised every

29
Ashley Lorance, “An Assessment of U.S. Responses to Greenwashing and Proposals to Improve
Enforcement,” 16.
30
Ibid
12

ten years— the newest coming out in 2023— based on consumer commentary.31 This year, the

FTC anticipates that they will provide more guidelines and support when dealing with claims

regarding net zero carbon emissions, climate change, and anything else the commenters believe

is necessary to make well-informed decisions in stores.32 However, another significant change

that could also be made is expanding their authority by making the interpretive guidelines into

actual rules. The FTC legally has the right to make enforceable statutes as discussed above, so

new rules could give them a clear indicator on when to take more frequent and targeted civil

action against violators. The Lanham Act and FTCA could also be amended to allow for

consumers to file complaints, which may allow for wider enforcement without restrictions such

as budget constraints. This suggestion isn’t a new idea as some individual states such as

California allow private citizens to enforce state statutes in court.33 Since each state already has

its own legislation, a federal amendment could be beneficial in giving any consumer in the nation

the chance to voice their concerns.

New solutions rooted in overwatch could also be implemented to limit the ambiguity of

whether a certain marketing tactic is even a form of greenwashing. It may be beneficial to take

inspiration from proposed EU regulations such as the Green Claims Directive. Like the FTCA

and Green Guides, the proposal would give clear guidance on what counts as an environmental

claim. However, it would also require companies to back up labels and claims such as

“Packaging made of 30% recycled plastic” with scientific evidence and be verified by an

independent accredited agency.34 This regulation could also be supplemented in the US by

31
Federal Trade Commission, “Regulatory Review; Request for Public Comment.” (Washington D.C.:
Federal Register, 2022).
32
Ibid
33
Ashley Lorance, “An Assessment of U.S. Responses to Greenwashing and Proposals to Improve
Enforcement,” 14.
34
“Green Claims,” European Commission, 2023,
https://environment.ec.europa.eu/topics/circular-economy/green-claims_en.
13

mandating that any information regarding how environmental standards were met or detailed

evidence about the product itself be made accessible to consumers via a website link, QR code,

etc. According to Frans Timmermans, Executive Vice-President for the European Green Deal,

this proposal can give consumers “the reassurance that when something is sold as green, it

actually is green.”35 Like overwatch groups, this approach would most likely add increased

transparency into a business’ production and formulation of a product to give consumers more

insight than what is currently provided via ads and packaging. When combined with other

third-party certifications, the government can ensure that consumers are buying products that are

doing exactly what they say they are doing.

Nevertheless, this proposal is still in the development stage and is just starting to get

attention; it is hard to determine how effective the directive would be in limiting greenwashing.

Furthermore, in order to be enacted in the US, the proposal would need to gain approval from

Congress and be vetoed by the President. This process could take years and may be stalled due to

Congress members’ differing political and personal ideologies. Even after being implemented,

the legislation would need to be enforced by independent verifiers and regulatory committees,

both of which come with substantial monetary costs to the federal government. However, the

United States has independent agencies like the Nuclear Regulatory Commission that are funded

by Congress, but recover 90% of their budget through fees (for license, testing and other

services) to give back to the Treasury.36 Even if the regulation itself is expensive and

time-consuming, establishing regulatory committees as independent agencies could considerably

reduce costs for the government in the long run. Other potential arguments come from those

35
“Consumer Protection: Enabling Sustainable Choices and Ending Greenwashing,” European
Commission, 2023, https://ec.europa.eu/commission/presscorner/detail/en/ip_23_1692.
36
Nuclear Regulatory Commission, “Revision of Fee Schedules; Fee Recovery for Fiscal Year 2022,”
Federal Register, 2022.
14

who believe in “small government” or the idea of the federal government having minimal

involvement in private lives and the economic market. These individuals often suggest voluntary

action and self-regulation to stop greenwashing, however studies have shown that those policies

“might not result in substantial improvements” due to a lack of accountability.37 In spite of

monetary, time and ideological constraints, it would be in the nation’s best interest to pursue

revised and new federal legislation.

Even with firm federal regulations, another crucial component of limiting the effects of

greenwashing would be to communicate with consumers, the primary stakeholders, directly. This

approach would be accomplished by providing consumers the resources they need to effectively

identify greenwashing and the steps they can take to learn more about the product before buying

it. Surveyors done with Australian consumers revealed that it is extremely difficult to make

decisions on what product they should buy as the information is not accessible while shopping.38

Providing tutorials and infographics on how to understand what different labels and claims mean

or are reliable may be helpful in allowing consumers to objectively read packaging and make

well-informed decisions. Similarly, having posters of the company’s carbon footprint and

evidenced sustainability actions taken could provide consumers readily-accessible insight into a

company’s environmental ideology while in a store.

37
Dennis Kolcava, “Greenwashing and Public Demand for Government Regulation,” Journal of Public
Policy 43, no. 1 (December 12, 2022): 1–20, https://doi.org/10.1017/s0143814x22000277.
38
Piet Ed Kommers et al., “Revealing Greenwashing: A Consumer’s Perspective,” in Proceedings of the
International Conferences on Internet Technologies & Society (ITS), Education Technologies
(ICEduTECH), and Sustainability, Technology and Education (STE) (Melbourne, Australia, 2016), 245–50,
https://eric.ed.gov/?id=ED571459.
15

Figure 5: Example infographic that can be placed in stores to help consumers (Alive To Earth)39
In addition, there are many resources currently available on the Internet (such as the

overwatch websites discussed above) that consumers could be made more aware of by promoting

them through ad campaigns and prominent figures. This has been done many times by

government officials, especially during the COVID-19 pandemic. Televised through major

national news channels and social media, the Biden administration and Department of Health and

Human Services used famous people like Ryan Seacrest and Eva Longoria to persuade

Americans to get the vaccine through the “We Can Do This: Live” campaign. Media coverage

has the potential to attract a wide range of viewers who may feel emotionally connected to their

favorite celebrities and influencers, garnering a larger discussion about greenwashing.

These regulations and communication campaigns could become inevitably costly and

politically polarizing. However, the costs could be balanced out with economic and

environmental benefits for both the government and companies. A study done in 2021 has shown

that of the surveyed 1000 American adults, “more than 80% consider trust a deciding factor” in

39
Deceiving vs. Reliable Labels, n.d., Alive to Earth, n.d.,
https://alivetoearth.org/what-is-greenwashing-5-tips-to-spot-and-avoid-it.
16

buying products.40 By creating trustworthy consumer relationships based on credible

information, companies could actually see more revenue due to increased retention and

repurchase rates. The environment will also benefit as companies would be incentivized to take

real action in order to claim their products are “sustainable” and avoid civil action, potentially

reducing carbon emissions, wildlife degradation, and so much more. For instance, Patagonia has

already voluntarily implemented green initiatives by using more than 80% less water than

standard denim dyeing methods and reducing textiles sent to landfills by creating products with

recycled materials.41 By having the government work alongside citizens and companies, the

United States could pave a path towards a more sustainable future and do their part in saving the

world for humans and animals alike.

Conclusion

In conclusion, the US government should consider modifying and adding new regulations

to limit greenwashing by companies and assist consumers in making well-informed decisions.

While there are currently federal solutions that have been successful to a certain extent, they

have been constrained by vague standards and little implementation. Regulations by private

entities such as certifications and websites are more successful, yet suffer from a lack of

awareness. By editing the FTCA and Lanham Act, modeling new regulations after the Green

Claims Directive, and increasing communication with the public, the US could see a decrease in

greenwashing and have a greater ability to prosecute violators. Even with the drawbacks faced

from time, money or ideological differences, it has become clear that new policies must be

implemented in order to work towards an environmentally-sound future.

40
Christine Alemany, “3 Ways Marketers Can Earn — and Keep — Customer Trust,” Harvard Business
Review, June 3, 2022, https://hbr.org/2022/06/3-ways-marketers-can-earn-and-keep-customer-trust.
41
Piet Ed Kommers et al., “Revealing Greenwashing: A Consumer’s Perspective,” 246.
17

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