The FTC has obtained a $1.2 million settlement in a follow-on action against glue manufacturer Chemence, the largest judgment for a Made in USA the agency has ever imposed. According to the FTC, Chemence violated a 2016 order involving deceptively labeled “Proudly Made in USA” glue products whose inputs were imported. Chemence subsequently provide trade materials claiming its private label glue products were all or virtually all Made in USA when significant proportions of the chemical inputs and overall costs to manufacture the products were attributable to foreign materials. The FTC’s new order prohibits unqualified “Made in USA” claims on Chemence products and requires qualified “Made in USA” claims to conspicuously disclose the origin of the parts and processing of the product. Under the terms of the agreement, Chemence is also required to notify customers and provide compliance reports to the FTC.
This monumental settlement signals a more forceful approach by the FTC to Made in USA labeling. Commissioner Rohit Chopra celebrated this action as a “turning point for the FTC’s enforcement strategy” and an “example of moving away from lax enforcement” for the Made in USA enforcement program in his accompanying statement. The unanimous decision comes after the FTC’s proposed rulemaking on Made in USA labeling this summer. Commissioner Chopra’s statement calls for the FTC to finalize the proposed rule and more broadly suggests that this aggressive enforcement is a “blueprint” for other areas.
Key takeaways:
- Companies selling products with Made in USA labeling should undergo a comprehensive compliance review to determine whether Made in USA labeling complies with current and proposed regulations.
- Keep tabs on the Commission’s rulemaking on Made in USA labeling as the new Democratic administration arrives.