On Sept. 26, 2019, the Federal Trade Commission will hold a half-day public workshop in Washington, DC to consider “Made in USA” and other types of U.S.-origin claims made by domestic and foreign sellers, consumer perception of such claims, the need for any changes to the FTC’s existing guidance, and other relevant issues.
Currently, the Commission’s 1997 Enforcement Policy Statement on U.S. Origin Claims provides guidance on how the Commission applies Section 5 of the FTC Act to the use of “Made in USA” and other U.S.-origin claims in advertising and labeling.
Workshop panels will include experts representing a wide range of perspectives, such as large and small manufacturers, retailers, and other industry representatives, and consumer groups.
In advance of the workshop, the FTC is soliciting comment on the following questions:
- How do consumers interpret “Made in USA” claims? Does this interpretation vary depending on the product advertised (e.g., do consumers interpret a claim made with respect to a shovel in the same way they do a claim made with respect to a smartphone)? Please provide any supporting studies, data, or other evidence.
- What rationales underlie consumer preferences for products made in USA? Does this vary by product? How? Please provide any supporting studies, data, or other evidence.
- What consumer perception testing of “Made in USA” claims has been done? Please provide any supporting studies, data, or other evidence.
- When consumers see product advertisements or labels stating or implying that products are “Made in USA” or the equivalent, what amount of U.S. parts and labor do they assume are in the products? Does this vary by product? Please provide any supporting studies, data, or other evidence.
- What are the costs and benefits of strictly enforcing an “all or virtually all” threshold for unqualified “Made in USA” claims? Please provide any supporting studies, data, or other evidence.
- What are the costs and benefits of enforcing a bright-line, costs-based standard (e.g., 85% of costs must be attributable to U.S. costs in order to make an unqualified claim)? Please provide any supporting studies, data, or other evidence.
- What are the costs and benefits of enforcing a flexible standard requiring case-by-case analysis? Please provide any supporting studies, data, or other evidence.
- How do consumers interpret qualified “Made in USA” claims (e.g., “Made in USA with Imported Content,” “Assembled in USA,” “50% Made in USA”)? Do they believe that “Assembled in the USA” means something different than “Made in USA?” How would they interpret a claim that a portion of the product is “Made in USA,” for example, that a product is “80 Percent Made in USA?” Please provide any supporting studies, data, or other evidence.
- Do consumers interpret “Made in USA” claims for similar products differently based on changes to manufacturing processes to increase or decrease the proportion of manufacturing costs attributable to U.S. costs? For example, consider Product A and Product B. For each, 20% of manufacturing costs are attributable to U.S. costs. However, until last year, 50% of Product A’s manufacturing costs were attributable to U.S. costs. On the other hand, until last year, 5% of Product B’s manufacturing costs were attributable to U.S. costs. How would this affect consumer perception of “Made in USA” claims? Please provide any supporting studies, data, or other evidence.
- Do consumers interpret “Made in USA” claims differently based on whether a firm’s product’s U.S. content is higher than that of its competitors’ products? For example, for a given industry, if a firm uses a higher percentage of U.S. content in its products relative to the rest of the industry, would this affect consumer perception of a “Made in USA” claim? Please provide any supporting studies, data, or other evidence.
- Do firms that advertise their products as “Made in USA” charge higher prices than their competitors whose products are not advertised in this way? Please provide any supporting studies, data, or other evidence.
- If a firm advertises its product as “Made in USA,” how does this affect the quantity of sales it makes? Specifically, does a “Made in USA” claim: (1) cause consumers to shift away from competitors’ products that are not advertised in this way, or (2) cause new consumers to purchase the product? If so, by how much does the quantity sold increase through each of these channels? Please provide any supporting studies, data, or other evidence.
- What remedies should the FTC seek against companies that make deceptive “Made in USA” claims?
- If the FTC issues a rule regarding “Made in USA” claims, violators could face civil penalties in addition to equitable relief. In awarding civil penalties, courts consider the defendant’s degree of culpability, any history of prior misconduct, ability to pay, effect on ability to continue doing business, and such other matters as justice may require. Given these factors, if the FTC should seek civil penalties against companies that make deceptive “Made in USA” claims in violation of a rule, how should the FTC calculate the penalty amount it seeks to impose?
- The FTC has addressed deceptive U.S.- origin claims by U.S. firms through its ongoing enforcement program. However, overseas firms selling directly to U.S. consumers through online sales platforms may also make deceptive U.S.-origin claims. Given the limits imposed by the Communications Decency Act, 47 U.S.C. 230(c)(1), as well as the limits on the FTC’s jurisdiction and resources, what steps should the agency take to address deceptive U.S.-origin claims made to U.S. consumers on third-party platforms by firms with no U.S. presence?
The FTC welcomes written comments, including further evidence of consumer perception. Interested parties may submit public comments electronically at Regulations.gov, or in paper form on these topics or other related topics through October 11, 2019. Paper comments may be mailed to Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue N.W., Suite CC-5610 (Annex B), Washington, DC 20580, or they may be delivered to Federal Trade Commission, Office of the Secretary, 400 7th Street SW, 5th Floor, Suite 5610 (Annex B), Washington, DC 20024. Please write “Made in USA Claims, Project No. P074204” on your comment so that it will be readily identified with this workshop.
For further information on the workshop and the public comment process, including instructions for filing comments in paper form, please visit the workshop website. If an entity has provided funding for research, analysis, or commentary that is included in a submitted public comment, please identify such funding and its source on the first page of the comment.
The workshop is free and open to the public. Seating will be on a first-come, first-served basis. Pre-registration is not required to attend this event. Please bring a valid government-issued photo ID such as a government badge, license, or passport. The security processing will include a metal detector and X-ray screening of all hand-carried items. The workshop starts at 8:30 a.m. in the FTC’s Constitution Center first floor conference rooms, 400 7th St., SW, Washington, DC, and will be webcast live. Registration information, directions to the event, and information about reasonable accommodations are available on the workshop website. A detailed agenda and list of speakers will be available in the near future. For general questions about the workshop, please contact us at firstname.lastname@example.org.
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Office of Public Affairs
Julia Solomon Ensor
Bureau of Consumer Protection