FTC Files Lawsuit Over “Made in USA” Claims
This week, the FTC filed a lawsuit against Chemence, Inc., alleging that the company is misleading consumers by claiming that many of their glues are made in the USA.
In order for a company to make an unqualified “Made in USA” claim, a product must be “all or virtually all” made in this country. Although Chemence advertised that its glues were “proudly made in the USA,” the FTC alleges that a significant proportion of the costs of the chemical components of the glues – approximately 55% – are attributable to imported chemicals that are essential to the glues’ function. Therefore, the company has fallen far short of the “all or virtually all” standard.
Chemence doesn’t just make its own products, though. The company also makes glues that are sold under retailer brand names, and it provides those retailers with marketing materials to help promote those glues. Because those marketing materials also include “Made in USA” claims, the FTC alleges that Chemence has provided others with the “means and instrumentalities” to deceive consumers.
As we’ve noted in previous posts – all of which were proudly written in the USA – the FTC has been actively investigating these types of claims. Most of those investigations, though, have ended in closing letters, with the companies agreeing to make modifications to their claims. This case demonstrates that there can be more serious consequences for failing to comply with the FTC’s standards.