Last week the FTC issued three letters closing three separate investigations of advertising practices by three different businesses. The letters are notable for the two common themes present in each. First, each investigation centered on allegedly unsupported “Made in the USA” claims, demonstrating the FTC’s continued vigilance on this issue–a point that has been the topic of past posts. Second, each investigation was closed without further action due to, at least in part, the advertisers’ willingness to cooperate and take remedial action to change is advertising practices.
These investigations demonstrate that the FTC will continue to enforce its rules regarding “Made in the USA” claims. According to the FTC, a blanket, unqualified claim that a product is “Made in USA” is likely to suggest to consumers that the product was “all or virtually all” made in the United States. So the FTC will hold an advertiser to that standard. In fact, the FTC stated in its Enforcement Policy Statement on the matter (as we blogged about here) that if “a product is not all or virtually all made in the United States, any claim of U.S. origin should be adequately qualified to avoid consumer deception about the presence or amount of foreign content.” And as the recently closed enforcement investigations show, if some of your products are made in the USA, but some are not, the advertising should be clear as to which ones are made here and which ones are imported.
These now-closed investigations also demonstrate an important practical point in dealing with the FTC. In each of these investigations, the advertiser cooperated and agreed to take remedial action, including altering the advertising at issue, training employees regarding the proper and substantiated advertising claims, and taking steps to clear the marketplace of the prior claims. This demonstrates that cooperating with the FTC’s investigation and coming to an agreement on revised advertising could be the most effective route in dealing with an FTC investigation in some circumstances.