The Federal Trade Commission (FTC) is intensifying its efforts to curb fraudulent ‘Made in USA’ claims, targeting companies that mislead consumers with false labeling. This initiative comes as the FTC enforces its Made in USA Labeling Rule, which mandates that products labeled as such must be “all or virtually all” made in the United States.
According to agency records, there are at least 51 investigations and enforcements in progress. Not all companies are playing by the rules…
Kubota’s $2 Million Penalty
In a significant enforcement action earlier this year, Kubota North America Corporation was penalized $2 million for falsely labeling its tractor replacement parts as ‘Made in USA’. According to the FTC, Kubota had labeled thousands of replacement parts for its tractors and other agricultural equipment as made in the USA, even though they were manufactured abroad.
Kubota has agreed to a stipulated court order that prohibits the company from making deceptive claims and mandates compliance with strict labeling standards. Kubota has also implemented new policies and processes to ensure the accuracy of its labels moving forward.
Williams-Sonoma’s Record Settlement
Another notable case involves Williams-Sonoma, who agreed to pay a record $3.18 million for violating a 2020 FTC order. The company had been previously warned but continued to market foreign-made products as ‘Made in USA’. This resulted in the largest civil penalty ever for such violations, highlighting the FTC’s resolve in enforcing its rules.
The Department of Justice, upon referral from the FTC, filed a complaint against Williams-Sonoma. The complaint charged that the company listed multiple products as ‘Made in USA’ when they were, in fact, manufactured in China and other countries. The company has since been required to correct its advertising practices and ensure truthful representation of product origins.
Old Southern Brass and Other Enforcement Actions
In addition to Kubota and Williams-Sonoma, Old Southern Brass was recently penalized for falsely advertising their products as ‘Made in USA’. The FTC found that the company had mislabeled products, claiming they were domestically produced when they were actually sourced from overseas.
The FTC’s enforcement actions are part of a broader strategy to protect consumers and honest businesses from deceptive marketing practices. Companies making unqualified ‘Made in USA’ claims must ensure that all significant parts and processing occur within the United States. Any deviation from this standard can result in severe penalties, including substantial fines and mandatory corrective actions.
Future Compliance and Monitoring
Given the recent historic settlements, it is anticipated that future FTC penalty amounts will continue to increase along with the volume of enforcement activity. FTC enforcement actions can begin unexpectedly, often triggered by anonymous tips from competitors, former employees, or consumers. Companies should proactively review their compliance with the FTC’s strict standards for ‘Made in USA’ claims to avoid similar penalties.
FTC’s Commitment to Consumer Protection
The FTC’s proactive stance aims to preserve the integrity of the ‘Made in USA’ label, but also consumers, who many times pay a premium for USA-made products to support American manufacturing and the local economy.
