In a recent closing letter, the Federal Trade Commission questioned whether Komar, Inc.'s marketing materials that promoted BedHead Pajamas complied with the Textile Products Information Act and its implementing rules. Specifically, the FTC said that BedHead failed to include required country-of-origin information and failed to disclose that certain products were made from imported fabrics.
Companies that are subject to the Textile Act are subject to mandatory country-of-original labeling requirements, regardless of whether the products are made in the United States. The Textile Act also requires marketers to disclose product origin in mail order advertising -- which includes websites. Essentially, materials must include a clear and conspicuous statement about whether a product was made in the United States, imported, or both.
The Textile Act's rules set forth a specific standard in order for companies to determine whether to mark a product as of U.S. origin. Significantly, this standard is different from the FTC's "all or virtually all" standard that it generally applies for "made in USA" claims. Instead, the Textile Act's rules say that, when determining whether a product should be marked as made in the United States, companies only need to consider the origin of the materials that are one step removed from the manufacturing process. For example, "a yarn manufacturer must identify imported fiber, a manufacturer of knitted garments must identify imported yarn, and a manufacturer of apparel made from cloth must identify imported fabric."
In an unrelated closing letter that the FTC sent to Iron Company on the same day, the FTC discussed another federal law -- the Buy American Act -- which has different requirements for identifying a product as "made in the United States."
On the heels of the FTC's Made in USA Workshop, it's interesting to see the FTC wrestling with the fact that -- even under federal law -- we've got different standards for determining whether a product is made here. Can it really be that, when you promote a product on your website, it's "made in the USA," but when you promote it in a television commercial, it's not? How are marketers supposed to thread that needle? These inconsistencies suggest that the FTC's "made in USA" standard is ripe for some revisions.
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