Misleading ‘Made in USA’ Claims Lead to FTC fines

Misleading ‘Made in USA’ Claims Lead to FTC fines

According to an article by Arent, Fox, Schiff, the Federal Trade Commission (FTC) has filed a complaint against Williams-Sonoma, the parent company of Pottery Barn and PB Teen, for breaching the FTC’s July 16, 2020, order prohibiting misleading “Made In USA” claims and mandating annual compliance reports. FTC found products violating the 2020 Order, many of which were previously deemed compliant by Williams-Sonoma. Notably, PB Teen mattress pads advertised as “Crafted in America” were fully imported from China.

The violations have incurred a hefty $3.17 million penalty, reflecting FTC Chair Lina M. Khan’s assertion that such deception harms consumers and honest American businesses. The settlement mandates Williams-Sonoma to submit annual compliance reports and restricts its “Made in USA” claims.

The settlement also delineates requirements for “Made in USA” claims, stressing the necessity of clear disclosures for products with foreign parts or processing. Moreover, it outlines criteria for products marketed as “Made in the USA,” emphasizing substantial transformation and assembly in the United States.

The episode underscores the importance of adherence to the Made in USA Labeling Rule. To steer clear of FTC scrutiny, the article says that companies must meticulously evaluate their claims and consider qualified disclosures when appropriate, as well as seek legal counsel to ensure compliance with FTC advertising guidelines.