Antitrust Law Daily Wrap Up, TOP STORY—“Made in USA” certification organization settles FTC deception charges, (Jul 22, 2014)

By Jeffrey May, J.D.

A company that licensed a “Made in USA” certification mark to firms wishing to make U.S.-origin claims for their products has agreed to settle FTC charges that it engaged in deceptive conduct in marketing its program. Made in the USA Brand, LLC has agreed to modify its certification program under a settlement with the agency. A check of the company's web site today showed a disclaimer that licensees self-certify and that Made in the USA Brand does not verify member claims that the certification standards are met (In the Matter of Made in the USA Brand, LLC, FTC File No. 142 3121).

According to the FTC's complaint, Made in the USA Brand (1) misrepresented that entities or products using its certification mark had been independently and objectively evaluated for compliance with the company's accreditation standard, and (2) misrepresented—or made unsubstantiated claims—that entities promoted on its website sold products that were all or virtually all made in the United States. The agency also alleged that the firm provided the means and instrumentalities to these third-party marketers to deceive consumers.

The FTC contends that Made in the USA Brand never rejected an application for use of its certification mark or terminated a company’s use of the mark. Instead, the respondent allegedly awarded licenses to any company that self-certified that it was complying with the FTC’s standard.

Under the terms of the proposed FTC consent order, the Ohio-based company would be required to refrain from representing that an entity met its accreditation standard, unless (1) there was an independent and objective evaluation to confirm that the accreditation standard was met; or (2) the company's mark and marketing materials prominently disclosed that the accreditation standard may be met through self-certification. The company also would be prohibited from making any country-of-origin claim about a product authorized to use its certification mark unless: (1) the claim is true, not misleading, and the company has a reasonable basis for substantiating the representation; or (2) it is clearly and prominently disclosed that covered entities may meet the accreditation standard through self-certification. In addition, Made in USA Brand would be prohibited from providing the companies it licensed with the means and instrumentalities to deceive consumers into believing that the companies were marketing products that were made in the USA.

“When marketers provide seals without any verification, or without telling consumers the seal is unverified, consumers are deceived and the value of all marketers’ seals is diminished,” said FTC Bureau of Consumer Protection Director Jessica Rich. “This case makes it clear that the FTC will not let that happen.”

Attorneys: Julia Solomon Ensor for FTC. Robert Cochran (Ice Miller LLP) for Made in the USA Brand, LLC.

Companies: Made in the USA Brand, LLC

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