Desperate Times, Desperate Measuring Cups – FTC Brings Enforcement Action for False “Made in USA” Advertising
The Made in USA Labeling Rule
The FTC’s labeling rule went into effect on August 13, 2021, and since then the Commission has been more aggressive about bringing enforcement actions for false or deceptive US origin marketing claims. The FTC has levied significant fines against companies who falsely represent that a product was made in the United States.
For a product to qualify as being made in the US the following conditions must be met:
- The final assembly or processing must occur in the United States,
- All significant processing of the product must occur in the United States, and
- All/virtually all of the ingredients or components of the product are made and sourced in the United States.
If these qualifications are not met, but a company nonetheless represents that its product was “Made in the USA,” the FTC may initiate an enforcement action.
FTC’s Recent Allegations Against Instant Brands
Despite Instant Brand’s claims that its Pyrex-brand products are “American as apple pie,” the FTC alleges that many of its glass measuring cups were actually manufactured in China from March 2021 to May 2022. As demand for bakeware went up during the COVID-19 pandemic, the FTC alleges that Instant Brands was unable to keep up and shifted its manufacturing of certain Pyrex-brand glass measuring cups outside of the United States. Despite this, Instant Brands continued to advertise that all Pyrex-brand products were made in the United States.
The FTC brought one count of false or misleading representation and required Instant Brands to pay a $129,416 fine. Instant Brands agreed to the FTC’s enforcement order, which also included several requirements for claims it makes:
- For unqualified claims, Instant Brands must show that virtually all the products are made and sourced in the United States, as well as the final assembly and all significant processing.
- For qualified claims, Instant Brands must include a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients/components, and/or processing.
- For assembly claims, Instant Brands must be able to show that the product was principally assembled in the United States, it is last substantially transformed in the United States, and its stateside assembly operations are substantial.
The main takeaway from this is that the FTC has continued to step up its enforcement under the “Made in USA” labeling rule, levying significant fines against companies who falsely represent the US origins of a product. Even if the production of a product shifts outside of the United States for a short period of time, a company is obliged to adequately qualify claims about the origin of its products. To reduce the risk of an enforcement action, companies should ensure that all US origin claims are adequately substantiated and that any marketing materials are not unintentionally falsely representing the US origins of a product.
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