“Made in USA” Compliance: Navigating Domestic Content Labeling Regulations
When it comes to advertising and marketing, it can be tempting for businesses to make exaggerated or even false claims about their products or services in order to attract more customers. However, such claims can be damaging both to the reputation of the business and to the consumers who rely on the accuracy of advertising to make informed decisions. In order to protect consumers and ensure fair competition in the marketplace, there are strict rules and regulations in place to govern advertising claims. Business owners and marketers must understand and adhere to these guidelines in order to avoid legal repercussions and maintain trust with their customers.
Regardless of the type of marketing claims being made or the product being marketed, there are some basic guidelines with which marketers should be familiar. This is the case for every form of marketing or advertising, including digital and audio forms, print materials, and even sponsorships. It is also in relation to marketing and advertising claims which are expressly made, and those claims which are implied.
Express marketing claims are those that are specifically and directly stated in an advertisement or marketing material. They are explicit and leave no room for interpretation. For example, a claim that a product will "whiten teeth in just one use" is an express claim.
Implied marketing claims, on the other hand, are those that are suggested or implied by the advertisement or marketing material, but not directly stated. They may rely on subtler language, images, or implications to make an impression on the consumer. For example, an advertisement for a luxury car that shows a couple driving through a picturesque mountain road may imply that the car is high-end, sophisticated, and stylish, without explicitly stating those claims.
Both express and implied marketing claims must be truthful and non-deceptive, and advertisers must be able to substantiate any claims they make. The Federal Trade Commission (FTC) is responsible for enforcing these regulations to protect consumers and ensure fair competition in the marketplace.
Manufacturers and importers who market their products as being "Made in the USA" must adhere to specific regulations governing domestic content labeling, with standards set by the FTC. The FTC has statutory authority to regulate the "Made in USA" label to ensure that products marketed as such are indeed manufactured or assembled in the United States.
FTC has oversight of all types of marketing claims and deceptive advertising for all products and services sold in the United States. With FTC’s authority in mind, all statements made in the course of advertising or marketing a product or service, and any disclosures related to such statements and claims, must be clear, truthful, conspicuous, and non-deceptive. Further, FTC requires that advertisers substantiate, or have evidence to support any claims they make.
To stay compliant, businesses must follow the FTC's guidance, which includes telling the truth, controlling consumer perception, and substantiating all claims with a reasonable basis. The FTC's enforcement policy statement on U.S. origin claims provides guidance on how Made in USA claims are understood by consumers and how businesses can substantiate them. This policy applies to all forms of marketing and all products advertised or sold in the U.S.
According to the FTC, the Made in USA claim requires that all or virtually all of the product be made in the United States, with a substantial transformation requirement that the product must have been substantially transformed in the U.S. The FTC aims to prevent consumer deception from marketers using the "Made in USA" claim and allows for alternative claims, such as "Assembled in the USA" or "Designed in the USA," which have less strict requirements but still must accurately reflect the product's origin.
The FTC's enforcement and compliance program includes business education, counseling, targeted enforcement, and prioritizes helping companies promote job creation and good work done in the USA without deceiving consumers. Heightened civil penalties are available for making deceptive "Made in USA" claims.
Businesses that fail to comply with the FTC's "Made in USA" labeling requirements may face fines, penalties, and damage to their reputation. To avoid these costly consequences, marketers are encouraged to give our office a call today. We can provide expert guidance on labeling requirements and help develop strategies for compliance.
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