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FTC to Hold September Workshop on "Made in USA" Claims
Sep 03, 2019
"Made in USA" claims are a perennially hot topic at the Federal Trade Commission (FTC). Despite the publication of the FTC's 1997
Enforcement Policy Statement on U.S. Origin Claims
, the Commission continues to crack down on false "Made in USA" (MIU) claims. The FTC has negotiated numerous consent agreements resolving false MIU claims, most recently with Patriot Puck and Sandpiper and Piper Gear, as we previously
. The FTC's database also shows over 150 closing letters involving MIU claims, with 7 issued in July of 2019 alone.
Members of both the FTC and Congress have called for even greater scrutiny of U.S. country of origin statements and stiffer penalties for businesses that deceptively promote their products as American-made. As the trade wars continue, U.S.-origin claims continue to be important in the marketplace. FTC Commissioners have been divided along party lines on whether consent agreements should require an acknowledgement of wrongdoing, disgorgement of profits, and other remedies.
Given interest in MIU claims by Commissioners, members of Congress, and the public, and continued concern about the number of false claims, the FTC is holding a half-day
on September 26, 2019 to bring together manufacturers, retailers, consumer groups, and other stakeholders. The FTC invites comments on a wide range of topics, including:
How do consumers interpret "Made in USA" claims? Does this interpretation vary depending on the advertised product?
What rationales underlie consumer preferences for products made in USA? Does this vary by product? How?
What kind of consumer perception testing of "Made in USA" claims have organizations carried out?
When consumers see product advertisements or labels stating or implying that products are "Made in USA" or the equivalent, what amount of U.S. parts and labor do they assume are in the products? Does this vary by product?
What are the costs and benefits of strictly enforcing an "all or virtually all" threshold for unqualified "Made in USA" claims?
What are the costs and benefits of enforcing a bright-line, costs-based standard?
What are the costs and benefits of enforcing a flexible standard requiring case-by-case analysis?
How do consumers interpret qualified "Made in USA" claims?
Do consumers interpret "Made in USA" claims for similar products differently based on changes to manufacturing processes to increase or decrease the proportion of manufacturing costs attributable to U.S. costs?
Do consumers interpret "Made in USA" claims differently based on whether a firm's product's U.S. content is higher than that of its competitors' products?
Do firms that advertise their products as "Made in USA" charge higher prices than their competitors whose products are not advertised in this way?
If a firm advertises its product as "Made in USA," how does this affect the quantity of sales it makes?
What remedies should the FTC seek against companies that make deceptive "Made in USA" claims?
What steps should the FTC take to address deceptive U.S.-origin claims made to U.S. consumers on third-party platforms by firms with no U.S. presence?
Interested parties may submit comments
through October 11, 2019. The latter two questions in particular could generate comments about whether the FTC should impose civil penalties on first-time violators, whether disgorgement of profits, consumer refunds, corrective advertising and other corrective action is needed, and how to address the reality of online marketing from a jurisdictional perspective.
Sheila A. Millar
Privacy, Data Security and Digital Media
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