Federal Trade Commission Finalizes Made in USA Labeling Rule
On July 1, the Federal Trade Commission (FTC) voted to adopt a final “Made in USA” (MUSA) rule, which incorporates guidance set forth in the FTC’s previous Decisions and Orders and its 1997 Enforcement Policy Statement on U.S. Origin Claims. The final rule, which will be published in the Federal Register, applies to all labels, whether they appear on product packaging or online, and includes mail order catalogs or mail order promotional materials that include a seal, mark, tag, or stamp declaring goods are “Made in the USA,” “Made in America,” or the equivalent thereof.
Consistent with the guidance, the rule will prohibit marketers from including unqualified MUSA claims on labels unless:
Final assembly or processing of the product occurs in the United States;
Significant processing that goes into the product occurs in the United States; and
All or virtually all ingredients or components of the product are made and sourced in the United States.
The FTC received hundreds of comments regarding the applicability of the Rule to products like beef and shrimp. The FTC shares jurisdiction over country-of-origin claims for food and agricultural products with the USDA and, in some instances, the FDA. As stated in the Rule, the USDA and FDA have primary jurisdiction over labeling issues for food products within their purview, and the Rule does not supersede, alter, or affect the application of any federal statute or regulation relating to country-of-origin labeling requirements, including but not limited to regulations issued under the Federal Meat Inspection Act, the Poultry Products Inspection Act, and the Egg Products Inspection Act. Notably, however, the USDA announced the initiation of a top-to-bottom review of the voluntary “Product of USA” claim which is currently permitted on imported products under FSIS’s jurisdiction, including beef products, that are processed in the US. The review is intended to complement the FTC’s Rule and alleviate any potential confusion in the marketplace.
As our readers are aware, there have been numerous class-action lawsuits related to the use of unqualified MUSA claims on food products. For past blog posts, see here and here. In addition to risk of potential lawsuits, manufacturers making unqualified MUSA claims may also face the FTC’s now broader legal authority and range of remedies, including the ability to seek redress, damages, and civil penalties, if such labeling claims are found to be false.
The final rule and adoption process is also covered in our Consumer Protection Connection blog post.