FTC Tells Kenall That Buy American Act Compliance Does Not Equal Made in USA

FTC staff closed an investigation of Kenall Manufacturing Co. on July 23, 2019. They had examined whether the lighting maker’s marketing overstated how much of its products are made in the USA.

The FTC’s concern

Staff wrote that most Kenall light fixtures are assembled in the USA and meet the domestic manufacturing requirements of the Buy American Act. However, they “incorporate significant imported content.” The Buy American Act generally treats a product as domestic when more than 50% of its component cost is from the USA. The FTC’s standard for unqualified Made in USA claims is that a product be “all or virtually all” made in the USA.

The guidance

• Kenall may promote that it employs USA workers and performs certain processes in the USA, as long as it does not overstate how much of its products are made in the USA.
• Kenall may make truthful claims that products meet Buy American Act requirements, but only in marketing materials available only to government buyers, or with qualifications that avoid deceiving consumers.

Citing Kenall’s actions and other factors, staff took no further action. The letter said the decision is not a finding that no violation occurred.

The Frankfurt Kurnit Klein & Selz law firm said the letter made clear that the FTC does not consider a product that is 50% USA-made to meet its “all or virtually all” standard.

FAQ

What did the FTC investigate?

Whether Kenall’s marketing overstated how much of its light fixtures are made in the USA.

Can companies say products meet the Buy American Act?

Yes, if the claims are truthful and either limited to government buyers or qualified to avoid deceiving consumers.

Did the FTC take action against Kenall?

No. Staff closed the investigation without further action.