The Federal Trade Commission (FTC) is seeking comments in its proposed Made in USA labeling rule. The law, created in July, would allow the FTC to seek civil penalties for false claims of American-made.
The proposed rule prohibits marketers from including unqualified Made in USA claims on labels unless
- final assembly or processing of the product occurs in the United States,
- all significant processing that goes into the product occurs in the United States, or
- all or virtually all ingredients or components of the product are made and sourced in the U.S.
Under these rules, marketers would no longer be allowed to include vague and misleading statements like, “Made in USA of U.S. and imported parts.”
For over 80 years, the FTC has taken enforcement actions against false Made in USA claims. Since issuing its enforcement policy in 1997, which imposed the “all or virtually all” standard, it has issued 24 administrative decisions and entered into four federal court settlements enforcing the standard. The latest enforcement action was against Williams-Sonoma in March 2020 after they falsely marketed several of their product lines to be almost wholly American-made. The company was required to pay $1 million to the FTC as part of the settlement.
In the official request for comment, the FTC states,
“The Commission proposes the Made in USA Labeling Rule for two primary reasons: To strengthen its enforcement program and make it easier for businesses to understand and comply with the law. Specifically, by codifying the existing standards applicable to MUSA claims in a rule as authorized by Congress, the FTC will be able to provide more certainty to marketers about the standard for making unqualified claims on product labels. In addition, enactment of the NPRM will enhance deterrence by authorizing civil penalties against those making unlawful MUSA claims on product labels.”
Comments are due by September 14, 2020 and can be submitted here.