FTC Finalizes Made in USA Rule Following TINA.org Petition

Yesterday, the FTC held its first open meeting in 20 years with recently confirmed Commission Chair Lina Khan presiding. At the top of the agenda was whether or not to finalize the agency’s Made in USA Labeling Rule that was proposed one year ago as a result of TINA.org’s Petition for Rulemaking. In the petition filed in 2019, TINA.org urged the FTC to use the authority specifically authorized by Congress to enact a rule that would allow the agency to fine companies engaged in deceptive made in the USA marketing. In a 3-2 vote, the commission finalized the rule, which will allow it to seek civil penalties (up to $43,280 per violation) against first-time made in the USA offenders who, up until now, have typically been given a free pass. (Hello, Walmart; hi there, Target.)

The rule will codify the “all or virtually all” standard, consistent with the FTC’s Enforcement Policy Statement on U.S. Origin Claims, meaning that any company that advertises a product as “made in the USA” must be able to substantiate that it is all or virtually all made in the United States or face financial penalties. The rule will apply to product labels, including seals, marks, tags or stamps in mail-order marketing (i.e., print or electronic advertising that solicit purchases without the consumer examining the actual product that’s for sale) that indicate the product is made in the U.S. (The types of marketing materials to which the rule applies is one of the issues the commissioners didn’t see eye to eye on.)

During the meeting, the commission also voted on whether to streamline the procedures for Section 18 rules prohibiting unfair or deceptive acts or practices, as well as two other matters pertaining to the reach of the FTC’s authority, each one getting the same 3-2 approval.

Following the formal meeting, the commission opened it up to members of the public for comment. And yes, TINA.org was “in the room where it happened” stating:

We believe the commission’s vote to finalize the rule will benefit not only consumers but also ensure that honest companies have an even playing field when it comes to made in USA marketing. FTC rules provide clarity and guidance for businesses seeking to follow the law and provide protection for consumers. Rules substantially increase deterrence in whole industries and effectively punish wrongdoers. Now, more than ever, with rising numbers of schemes taking advantage of seniors, veterans and communities of color, we need rules that will protect these susceptible groups and all American consumers.

So let’s hear it this 4th of July – three cheers for the FTC and (honest) made in the USA marketing!