Recently, the Federal Trade Commission (“FTC”) issued a new rule to prevent “Made in USA” labels from being used fraudulently. This new rule codifies the FTC’s policy which requires products which are labeled as “Made in USA”, to be supported by proof that all or virtually all of the product is made in the United States. Additionally, the product must be made from materials which are sourced from U.S. manufacturers. This new rule also expands the remedies which the FTC is authorized to seek, including commencing a civil action to seek civil penalties. Any product which represents that it is made, manufactured, built, produced, created, or crafted in the United States, is covered under this rule.
The FTC’s rules have gotten more stringent when it comes to “Made in USA” labels because of the meaning that these labels have. These labels signal a sense of national pride and communicate that the brand holds itself to certain standards. Brands which falsely use these labels can water down the meaning of what it means to be “Made in USA”. However, this new rule will require any person who tries to advertise a product labeled as “Made in USA”, to provide proof that the entire product or substantially all of the product is of domestic origin. It is possible that the enactment of this rule could slowly return “Made in USA” to its original meaning.
The Food and Drug Administration (“FDA”) and U.S. Department of Agriculture (“USDA”) also have rules regarding “Made in USA” labeling claims. Because both of these agencies have primary jurisdiction over their own regulated products, they can choose whether or not they would like to change their requirements to conform to the requirements set out in the FTC’s new rule.
Now more than ever, it is especially important that brands meet the FTC’s requirements prior to marketing a product as Made in USA or in America. Otherwise, brands run the risk of facing civil penalties. The FTC’s rule will be active 30 days after publication in the Federal Register. For more information and detail on the FTC’s new rule, you can visit the rule here.