FTC’s November "Made In USA" Enforcement: Butt Wipes And Countertops – Media, Telecoms, IT, Entertainment – United States – Mondaq News…

03 December 2020

Frankfurt Kurnit Klein & Selz

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In November, the Federal Trade Commission closed twoinvestigations into whether marketers made deceptive claims thattheir products are made in the United States. Perhapsinspired by the fact that we're spending so much time at homeduring the pandemic, last month, the FTC focused its "made inUSA" enforcement activities on the bathroom and the kitchen.In order to make an unqualified claim that a product is madein the United States, the FTC requires a marketer to substantiate that theproduct is "all or virtually all" made in the U.S.

The FTC looked into whether Dude Products overstated the extentto which its "Dude Wipes" and other hygienic products aremade in the United States. (As the company explains, Dude Wipes are "wet wipesspecifically for cleaning your butt and dude regions.")The FTC said that, all the company's wipes undergosignificant manufacturing or processing in the United States, insome instances they incorporate significant imported components.Although it's appropriate for a company to promote thefact that it supports other companies that perform manufacturingfunctions in the United States, in its letter closing the investigation, the FTC saidthat, "just because a supplier has a United States location,or conducts certain operations in the United States, does notnecessarily mean that the products it offers are 'all orvirtually all' made in the United States." The FTCcautioned that, "manufacturers and marketers would be wise toask the supplier for specific information about the percentage ofU.S. content before they make a U.S. origin claim."

The FTC also looked into whether Dal-Tile Corporation overstatedthe extent to which its "American Reserve" quartz slabproducts -- which can be used on floors, walls, and countertops,for example -- are made in the United States. The FTC saidthat, although the Company substantially transforms its AmericanReserve products into finished goods in the United States,"because quartz material has limited availability in the U.S.,the Company imports essential raw materials it incorporates intothese products." And, again, the FTC explained in itsclosing letter, that, although it's appropriatefor the company to promote the fact that it employs workers andperforms certain processes in the United States, the company'smarketing should not "overstate the extent to which productsare made in the United States." The FTC also cautionedthe marketer not to "make overly broad U.S.-origin claims onmarketing materials that refer to multipleproducts."

Both of these investigations highlight an area where marketersoften get tripped up when dealing with the FTC's "made inUSA" standard. Marketers often assume that, becausethey've got substantial manufacturing operations in the UnitedStates, it means that their products are made here. But, asboth of these closing letters explain, looking at where you makeyour products is not the end of the analysis. You've alsogot to look at a product's components and raw materials aswell, in order to determine whether they were foreign-sourced.If they were, then further analysis is required in order todetermine whether the foreign inputs are so negligible that theproduct can still be promoted as being made in the UnitedStates.

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