Federal Trade Commission Chairman Joseph Simons told a Senate subcommittee on November 27, 2018, that the agency is exploring whether it can find a Made in USA case suited for monetary relief. Until then, the FTC had sought only injunctive relief in such cases.
What the commissioners said
Sen. Shelley Moore Capito (R-W.Va.) asked how common fraudulent USA-origin labels are. Simons answered: “This is fairly prevalent. We get hundreds of these, hundreds of complaints a year.” He said many companies stop once told they are breaking the rules, and the FTC sues those that don’t.
- Rohit Chopra said false claims hurt “every American manufacturer who is trying to do right.” He said he wanted the FTC to be “much more aggressive” and to cut down on settlements that end in “no money, no findings of fact.”
- Rebecca Kelly Slaughter noted that to get money, the FTC must currently show monetary harm and a price premium, which “can be very difficult to do.”
Pressure from manufacturers
A week earlier, the Alliance for American Manufacturing (AAM) urged the FTC to seek restitution, or at least an admission of fault, the first time a company falsely labels products as made in the USA, the Wall Street Journal reported on November 20. The agency’s longstanding practice was to seek money only after a second violation.
The push followed the FTC’s fall 2018 settlements with Patriot Puck, Sandpiper/PiperGear and Nectar Sleep. None of those companies paid money. The FTC later finalized the puck and gear orders in a 3-2 vote in April 2019.
FAQ
What did Chairman Simons say?
That the FTC gets hundreds of Made in USA complaints a year and is exploring a case suitable for monetary relief.
What did the Alliance for American Manufacturing want?
Restitution, or at least an admission of fault, on a first violation.
Why was getting money hard for the FTC?
Commissioner Slaughter said the agency had to show monetary harm and a price premium.
Source & credit
Source: Kelley Drye, Ad Law Access: “FTC Testimony Signals Possible Increase in ‘Made in USA’ Advertising Scrutiny”, with a transcript excerpt of the November 27, 2018 hearing.
Also: The Wall Street Journal: “U.S. Manufacturers Push FTC to Crack Down on False ‘Made in America’ Labels”; Fox Business: “American manufacturers want crackdown on fake ‘Made in USA’ labels”.