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From Antitrust Law Daily, September 12, 2018

FTC cracks down on ‘Made in USA’ claims in three cases

By Peter Reap, J.D., LL.M.

In three separate cases involving "Made in USA" claims: (1) companies selling hockey pucks have agreed to stop making false claims that the hockey pucks they sell are all, or virtually all, made in the United States; (2) two related companies that sell recreational and outdoor equipment have agreed to stop making false, misleading, and unsupported "Made in USA" claims regarding their products; and (3) the FTC has approved a final consent order settling charges that California-based Nectar Brand made false claims that its Chinese-made mattresses are assembled in the United States, the FTC announced today.

Hockey pucks. In the case involving hockey pucks, the FTC alleged that four related Farmingdale, New York-based companies doing business as Patriot Puck, and their officer, George Statler III, allegedly included claims on their website and elsewhere online, that their pucks are "Made in America," "Proudly Made in the USA," "100% American Made!" and "The only American Made Hockey Puck!." In fact, Patriot Puck’s hockey pucks are wholly imported from China. Since January 2016, Statler and the companies doing business as Patriot Puck -- which include Underground Sports Inc., Hockey Underground Inc., Ipuck Inc., and Ipuck Hockey Inc. -- have imported more than 400,000 standard-weight pucks, the complaint stated.

Under the terms of the proposed settlement order, Statler and the four Patriot Puck companies are prohibited from making unqualified U.S.-origin claims for their products, unless they can show that the products’ final assembly or processing, and all significant processing, take place in the United States, and that all or virtually all ingredients or components of the product are made and sourced in the United States. Under the order, any qualified Made in USA claim must include a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients, and/or processing. The order also prohibits the respondents from making untrue, misleading, or unsubstantiated country-of-origin claims in their marketing materials about any product or service.

Recreational and outdoor equipment. California companies Sandpiper of California and PiperGear USA were alleged in the FTC’s complaint to have claimed in advertisements, product labels, promotional materials, and on company websites and social media, that their backpacks, travel bags, wallets, and other products are all or virtually all made in the United States. In fact, more than 95% of Sandpiper’s products are imported as finished goods, and approximately 80% of PiperGear’s products are either imported as finished goods or contain significant imported components, according to the complaint. The respondents import products or components from Mexico and China and, for certain wallets imported from Mexico as finished goods, they hid truthful country-of-origin information on the back of tags, and inserted cards that prominently displayed false U.S.-origin claims.

The FTC’s proposed settlement order with Sandpiper and PiperGear includes prohibitions and conditions that are virtually identical with those imposed by the proposed order involving the hockey puck sellers described above.

Mattresses. Finally, following a public comment period, the FTC has approved a final consent order that settles charges California company Nectar Brand falsely claimed that its Chinese-made mattresses are assembled in the United States. The order prohibits the company and its agents from making any representation that a product or service is Made in the United States unless:

  • The final assembly or processing of the product occurs in the United States, all 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; or
  • A clear and conspicuous qualification appears immediately adjacent to the representation that accurately conveys the extent to which the product contains foreign parts, ingredients or components, and/or processing; or
  • For a claim that a product is assembled in the United States, the product is last substantially transformed in the United States, the product’s principal assembly takes place in the United States, and United States assembly operations are substantial.

MainStory: TopStory ConsumerProtection Advertising FederalTradeCommissionNews

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