Analysis of Proposed Consent Order
The Federal Trade Commission has accepted an agreement, subject to final approval, to a proposed consent order from respondents The Wire Works, Inc., and Electrodes, Inc.
The proposed consent order has been placed on the public record for sixty (60) days for reception of comments by interested persons. Comments received during this period will become part of the public record. After sixty (60) days, the Commission will again review the agreement and the comments received and will decide whether it should withdraw from the agreement and take other appropriate action or make final the agreement's proposed order.
This matter concerns advertising, labeling, and promotional practices related to the sale of brass electrical discharge machining ("EDM") wire electrodes. Wire EDM is a metal removal technique that is used to cut metal parts. The Commission's complaint charges that respondents misrepresented that certain of its EDM wire electrodes were all or virtually all made in the United States when, in truth and in fact, a substantial portion of their content was of foreign origin.
The proposed consent order contains a provision that is designed to remedy the charges and to prevent the respondents from engaging in similar acts and practices in the future. Part I of the proposed order prohibits the respondents from misrepresenting the extent to which their EDM wire electrodes are made in the United States. The proposed order would allow respondents to represent that such EDM wire electrodes are made in the United States as long as all, or virtually all, of the components of the EDM wire electrodes are of U.S. origin and all, or virtually all, of the labor in manufacturing them is performed in the United States. It also would allow respondents to make a representation regarding the U.S. origin or U.S. content of their EDM wire electrodes product as permitted in future regulations, guides, or enforcement policy statements promulgated by the Commission. The proposed order further would allow respondents to describe the specific processing that is performed on the product in the United States, e.g., that the product is "Drawn in the U.S.A.," "Annealed in U.S.A.," "Coldworked in U.S.A.," or "Strengthened in U.S.A.," so long as the claim is truthful and substantiated. If the product is not last substantially transformed in the United States, the proposed order would require the respondents to comply with regulations and rulings issued by the U.S. Customs Service under section 304 of the Tariff Act, 19 U.S.C. § 1304.
Part II of the proposed order requires the respondents to maintain materials relied upon in disseminating any representation covered by the order. Part III of the proposed order requires the respondents to distribute copies of the order to certain company officials and employees. Part IV of the proposed order requires the respondents to notify the Commission of any change in the corporations that may affect compliance obligations under the order. Part V of the proposed order requires the respondents to file one or more compliance reports. Part VI of the proposed order is a provision whereby the order, absent certain circumstances, terminates twenty years from the date of issuance.
The purpose of this analysis is to facilitate public comment on the proposed consent order. It is not intended to constitute an official interpretation of the agreement and proposed order or to modify in any way their terms.