The FTC recently announced a settlement with pulley block manufacturer, Block Division, Inc., arising out of Block Division’s “Made in USA” claims. Specifically, Block Division used imagery of the American flag combined with copy stating “Made in USA” and “Made in the USA American Product” in its catalogue and in Facebook posts without any disclaimers specifying what parts of the product were made in the U.S. (what the FTC calls “unqualified” claims). The FTC alleged that the pulley blocks and other Block Division products incorporated significant imported parts essential to the function of their products, including imported steel plates that entered the U.S. already stamped “Made in USA”.
The terms of the settlement prohibit unqualified “Made,” “built,” “produced,” or “manufactured” in the U.S. claims unless the unqualified claims comply with the FTC’s rigorous standard for unqualified “made in USA” claims: the product’s final assembly or processing and all significant processing that goes into the product occurs in the U.S.; and all or virtually all ingredients or components of the product are made and sourced in the U.S. If an unqualified claim cannot be supported, the settlement requires a clear and conspicuous qualification appearing “immediately adjacent” to the representation that accurately conveys the extent to which the product contains foreign parts, ingredients, and/or processing.
Tip: This settlement marks the second FTC settlement regarding “Made in USA” claims in five weeks, signaling the FTC’s continued focus on enforcement in this area. Given the strong preference stated by the current political administration for American products, “Made in USA” claims will likely continue to be popular amongst advertisers and consumers alike. We expect the FTC to continue to focus in this area, especially on broad, unqualified claims.