FTC to Hold ‘Made in USA’ Advertising Claim Workshop
U.S. – Origin Claims Workshop
The FTC has announced a forthcoming workshop to review research on consumer perception of U.S.-origin claims and to consider measures to strengthen Made in USA enforcement program.
The workshop will take place on September 26, 2019 in Washington D.C. and address claims made by domestic and foreign sellers, consumer perception of such claims, and the need for any changes to existing guidance by FTC lawyers.
FTC Soliciting Comments
The FTC’s current Enforcement Policy Statement on U.S. Origin Claims provides guidance on how the agency applies Section 5 of the FTC Act to the use of “Made in USA” and other U.S.-origin claims in advertising and labeling.
Participants will include experts, including manufacturers, retailers and consumer groups.
The FTC is currently soliciting comment on the following questions:
- How do consumers interpret “Made in USA” claims?
- Does this interpretation vary depending on the product advertised?
- What rationales underlie consumer preferences for products made in USA? Does this vary by product?
- What consumer perception testing of “Made in USA” claims has been done?
- 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?
- 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 (e.g., 85% of costs must be attributable to U.S. costs in order to make an unqualified claim)?
- 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 (e.g., “Made in USA with Imported Content,” “Assembled in USA,” “50% Made in USA”)?
- Do consumers believe that “Assembled in the USA” means something different than “Made in USA?”
- How would consumers interpret a claim that a portion of the product is “Made in USA,” for example, that a product is “80 Percent Made in USA?”
- 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 FTC lawyers 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?
Substantiation for Unqualified “Made in USA” Claims
While the FTC has not issued regulations specifically covering “Made in USA” and other U.S.-origin claims, its 1997 Enforcement Policy Statement On U.S. Origin Claims provides guidance on how the Commission applies Section 5 of the FTC Act, 15 U.S.C. § 45(a) to the use of such claims in advertising and labeling.
The Policy Statement states that when a marketer makes an unqualified “Made in USA” claim, the marketer should, at the time of the representation, have a reasonable basis for asserting that “all or virtually all” of the product is, in fact, made in the United States. The Policy Statement also provides guidance to marketers on how to make appropriately qualified claims.
Digital marketers should consult with experienced FTC compliance counsel before disseminating U.S. origin claims.
Richard B. Newman represents digital marketers in advertising substantiation proceedings and investigations conducted by the Federal Trade Commission and state attorneys general.
Informational purposes only. Not legal advice.