Made in USA FTC Rule Imposes No New Obligations but Hikes Penalties
The Federal Trade Commission voted 3-2 July 1 to adopt a rule that would penalize marketers who improperly use Made in USA claims on labels. The FTC will be able to seek civil penalties of up to $43,280 per violation, said an agency news release. The commissioners in the majority issued a statement that said in part, "Importantly, this is a 'restatement rule,' which affirms longstanding guidance and legal precedent with respect to Made in USA labels -- thereby imposing no new obligations on manufacturers and sellers."
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The new rule codifies a broader range of remedies by the FTC against "those who lie about a Made in USA label. It will enable the Commission for the first time to seek civil penalties of up to $43,280 per violation of the rule," the statement said.
Commissioner Christine Wilson dissented, both because she thinks that including online claims of Made in USA is beyond the FTC authorities, and because she doesn't think the past enforcement of Made in the USA claims was too permissive. "I believe that administrative consents, which were an integral part of this program, can be an appropriate remedy to address deceptive MUSA claims, consistent with the views of bipartisan Commissions during the last 25 years," she said.
Over the course of the rulemaking, the FTC heard from ranchers and shrimpers who wanted country of origin labeling on beef or shrimp that is different from current practice. The FTC said it does not have the authority to address those issues, but said that USDA will be examining its labeling rules. Commissioner Rohit Chopra said, "I also believe that unqualified 'Product of USA' claims for meat products are only appropriate when the animal was born, raised, and slaughtered in the United States." The Appellate Body at the World Trade Organization ruled in 2015 that country of origin labeling on meat was protectionist against Canadian and Mexican producers (see 1505180018) and Congress repealed COOL to avoid facing tariffs from its NAFTA trading partners.