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FTC Makes Sure It's Made In USA ..."Made in USA" claims are only substantiated if "all, or virtually all" of a product is made in the United States. Stuart L. Friedel Alison DeGregorio e-mail this article URL The FTC recently affirmed its commitment to ensuring that manufacturers do not inaccurately make "Made in USA" claims. In December 2000, the FTC agreed to settle charges it brought against the Black and Decker Corporation ("Black and Decker") and its wholly owned subsidiary, Kwikset Corporation ("Kwikset"). The FTC charged both corporations with misrepresenting that certain of Kwikset's residential locks and lock systems were made in the United States. According to the FTC, these locks were actually made with many foreign components. The FTC's charges against Black & Decker and Kwikset come exactly three years after the FTC concluded that all "Made in USA" advertising and labeling claims must confirm to the "all, or virtually all" standard that the Commission has traditionally applied. Pursuant to this standard, "Made in USA" claims are only substantiated if "all, or virtually all" of a product is made in the United States. According to the FTC, Kwikset made many misrepresentations regarding the manufacturing of many of its lock products. For example, Kwikset's website stated that "Kwikset produces all of its products in the United States at four manufacturing facilities, employing more than 2,700 people." Further, the packaging for some of its products stated "All American Made and Proud of It" on a stars and stripes shield. Immediately adjacent to these words was small print that read "Assembled in Mexico." The FTC's complaint charged that representations such as these misleadingly implied that "all, or virtually all" of the products were made in the United States. In actuality, the products were manufactured with significant foreign components. The proposed settlement prohibits Black and Decker and Kwikset from representing that certain of their locks are manufactured in the United States. These products include locksets, deadbolts, knobs, and handles. Further, Black and Decker and Kwikset cannot use the legend "All American Made" or "All American and Proud of it" unless the product bearing the legend is in fact "100% made in the United States." The proposed settlement also contains a number of record-keeping and reporting requirements designed to assist the FTC in monitoring Kwikset's compliance with the Order. The FTC's settlement with Black and Decker and Kwikset shows that the FTC is committed to ensuring truthful advertising and labeling with regard to "Made in USA" claims. To help businesses implement this standard, the Commission issued a business guide in December 1998 entitled "Complying with the Made in USA Standard." In this guide, the FTC provides specific examples of where "Made in USA" claims are appropriate, how to calculate U.S. content, where qualified U.S. origin claims are appropriate, and how to substantiate "Made in USA" and other origin-related claims. The guide even addresses how "Made in USA" guidelines interact with Customs rules. Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection, emphasized the significance of "Made in USA" claims when the FTC issued its business guide. Ms. Bernstein stated, "The claim that a product is "Made in USA" is important to many consumers as they make purchasing decisions." Before issuing its guide, the FTC asked for public comment in order to ascertain what reasonable consumers expect when they sees a "Made in USA" label. The results of this study helped the FTC draft its standards. Indeed, Jodie Bernstein stated that, "The record, in particular, the overwhelming response to our request for public comment on the proposed "substantially all" standard, convinced us that when consumers see a 'Made in USA' label, they expect and want it to mean just that. The policy statement we are issuing today will provide additional guidance to companies seeking to make these claims." A look at the FTC's business guide regarding the "Made in USA" standard and its reasons for implementing it shows why the FTC investigated Black and Decker and Kwikset. If Kwikset's lock products did not conform to the "all, or virtually all" standard, then its representations were indeed misleading. This recent investigation and settlement shows that the FTC is serious about enforcing its "Made in USA" guidelines. © 2001 Davis & Gilbert LLP       Davis & Gilbert LLP • 1740 Broadway • New York, NY 10019 tel: 212.468.4800 • fax: 212.468.4888   Privacy Policy • Terms & Conditions