The Federal Trade Commission today announced that it will conduct a comprehensive review of consumers' perceptions of "made in USA" advertising claims. The Commission will hold a public workshop and will invite various industry and trade associations, consumer groups and other government entities to participate in an exchange of views on a number of issues. The Commission intends to review, among other things, whether its longstanding standard that a product must be wholly domestic before a marketer can make an unqualified "made in USA" claim, is appropriate in today's global economy.
In light of the decision to review the standard for domestic content claims, the FTC has rejected a proposed settlement with Hyde Athletic Industries, Inc. and has directed its staff to renegotiate a modified consent order based on a revised complaint. The revised complaint retains FTC allegations that Hyde made advertising claims that all of its Saucony footwear is made in the United States, when a substantial amount of Saucony footwear is wholly made in foreign countries. The revised complaint deletes the previous FTC allegations that, of the Saucony footwear assembled in the United States, a substantial amount consist largely of foreign component parts. In addition, the revised complaint deletes language interpreting "made in USA" to mean that all, or virtually all of the parts and labor that go into making Saucony footwear is domestic.
FTC Chairman Robert Pitofsky said "the public comment period on the Hyde settlement, during which the FTC received over 150 comments from consumers, industry, and trade associations, has served well to highlight the difficulties of defining a 'made in USA' standard. Deceptive 'made in USA' claims might make a real difference to a large segment of American consumers. The public workshop will explore the best way to deal with this issue."
The FTC soon will publish a notice in the Federal Register outlining in more detail the issues that will be discussed at the workshop, the date and place it will be held, and how to request to be a participant.
The Commission vote to direct staff to renegotiate a revised consent agreement with Hyde Athletic Industries and to conduct a public workshop to examine consumer perceptions of "made in USA" claims was 4-1, with Commissioner Roscoe B. Starek, III, dissenting. In his dissenting statement, Commissioner Starek said, "if consumer understanding of 'Made in USA' claims varies from industry to industry or supports some other standard, the most promising way to develop that evidence is by copy testing the particular ads at issue in individual cases, not by conducting workshops." Commissioner Starek agrees that Commission guidance on how to comply with the standard would be useful, but thinks it could be provided without rejecting the current consent agreement. "This case presents us with a clear violation of Section 5 of the FTC Act disseminated in a widespread national ad campaign. It does not turn upon whether a particular method of calculating domestic content is reasonable," Starek concluded.
Copies of FTC documents in the Hyde case and the dissenting statement by Commissioner Starek are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest FTC news as it is announced, call the FTC's NewsPhone recording at 202- 326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov
(FTC File No. 922 3236)