FTC’s March Closing Letters — More “Made In USA” Investigations – Media, Telecoms, IT, Entertainment – United States – Mondaq News Alerts

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As part of its continued focus on deceptive “made in
USA” claims, in March, the FTC closed three investigations all
involving allegations that the advertiser overstated the extent to
which its product was made in the United States. 

In a March 11, 2021 
letter
 to Boogie Bikes, the FTC expressed concerns that
the company overstated the extent to which certain of its electric
bicycles are made or “built” in the United States.
 The FTC explained that, although Boogie Bikes designs and
performs complex custom assembly in the United States, its bicycles
incorporate significant imported parts.  Under the FTC’s “made in USA” 
standard
, in order to make an unqualified claim that a product
is made in the United States, the marketer must be able to
substantiate that the product was “all or virtually all”
made in the United States.

In a March 15, 2021 
letter
 to De Roblin Corp, which does business as Mia
Secret, the FTC expressed concerns that the company’s marketing
materials may have overstated the extent to which its cyanoacrylate
nail glues are made in the United States.  Specifically, the
FTC pointed to the fact that, although the company sources nail
glues from a supplier that substantially transforms the
cyanoacrylates in the United States, those glues incorporate
significant imported ingredients.  The FTC cautioned the
company not to assume that, just because a supplier is based in the
United States, that it means that the products it offers are “all or virtually all” made in the United States.
 The FTC recommended that, “manufacturers and marketers
would be wise to ask their suppliers about the percentage of U.S.
content before they make a U.S. origin claim.” 

And, in a March 2, 2021 
letter
 to Ariat International, the FTC raised two concerns
related to the company’s compliance with its obligations under
the Textile Products Identification Act and implementing rules,
which require certain country of origin disclosures in labeling and
in certain types of marketing materials (such as on websites).
 First, the FTC said that Artiat advertised certain apparel
products as “crafted with fabric made in the USA” without
disclosing the products were sewn into finished garments in Mexico.
 Second, the FTC said that, for some products, Ariat failed to
include any country-of-origin information.  

In all of these investigations, the FTC decided not to take
further action, in reliance, at least in part, on each
company’s commitment to take remedial action to prevent
deception in the future. 

What are some important take-aways from this latest round of
closing letters?  

  • The FTC’s interest in “made in USA” claims
    continues, so it’s important to make sure that you’ve got
    proper substantiation for your claims — and that your claims are
    qualified, as necessary.  
  • An issue that came up here — which has been a theme in many
    FTC closing letters in the past few years — is the confusion that
    some companies may have between what it means to have substantial
    manufacturing operations in the United States and what it means to
    be “made” here, which takes into account not only where
    it was “made,” but where the components were
    made. 
  • The Mia Secret letter also highlights the importance of not
    only relying on the fact that you’ve sourced materials from
    U.S.-based suppliers in order to make a “made in USA”
    claim.  You’ve still got to determine where the where the
    components were sourced from.  
  • And, finally, the FTC has recently stepped up its Textile
    Act-related enforcement as well.  If you’re selling
    products covered by the Act, you’d better make sure that your
    labels and other covered marketing materials — including your
    website! — include proper country-of-origin claims.  Unlike
    the FTC’s “Made in USA” standard, the Textile Act and
    Rules actually require statements about where the product was
    made. 

Originally Published by Frankfurt Kurnit Klein & Selz
PC

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