Overview:
FTC Chairman Andrew Ferguson designated July as “Made in the USA” Month. How can consumer surveys help advertisers support their claims about their products’ origins?
FTC Inaugurates “Made in the USA” Month With Warning Letters
In July, the FTC sent a series of letters to manufacturers that were importing products or portions of products and advertising them as “Made in the USA.” The manufacturers were reminded of the consequences of making false claims and asked to respond in five days. The Commission also sent letters to certain online platforms that hosted third-party sellers who appeared to make deceptive Made in USA claims. The letters reminded recipients of the risks associated with failing to comply with the guidelines.
Among the online platforms that received letters were third-party selling platform giants Amazon and Walmart. In the letter, the FTC did not decide whether the platforms themselves had violated the law, but did recommend that the platforms take action to ensure that their advertising was compliant.
All or Virtually All or Nothing: FTC Guidelines for Made in the USA Claims
Marketers and advertisers use “Made in the USA” claims to appeal to consumers who like the idea of supporting U.S. job creation, view domestic products as most trustworthy, or have other reasons to prefer domestically made products. They use various visual communications to make claims about the origin of products, from “Made in USA” badges to red, white, and blue branding to flags on product pages.
The FTC has specific guidance for these “Made in the USA” claims. To make unqualified claims (e.g., “Made in USA” with nothing more), companies must base all or virtually all of the product’s components and processing in the U.S. Qualified claims (e.g., “made in the United States with imported materials”) must include clear, prominent, and accurate disclaimers.
To comply with FTC guidelines, businesses must substantiate the claims they make or face regulatory consequences. Consumer perception surveys can be an effective tool for substantiating and refining many of these claims. Surveys can measure whether the context of a claim (e.g., an American flag next to “Designed in USA”) impacts consumer perceptions; how consumers understand qualified claims (e.g., “Assembled in the USA with global parts”); or whether visual or implied cues give a misleading impression of U.S. origin. They can also provide insights about whether this kind of labeling motivates consumers to purchase the products.
Survey Evidence, Made in the USA
The FTC recognizes properly designed and executed perception surveys as valid substantiation for “Made in the USA” claims. Should the FTC require retailers and platforms to take a greater share of responsibility for truth in advertising, survey evidence may play a role in determining the deceptiveness of claims.
The FTC’s July warnings could signal a new approach to misleading origin claims in e-commerce, where visual cues and quick impressions can unintentionally mislead. If you require surveys for advertising claim substantiation, litigation, or marketing research, reach out to MMR Strategy Group, an IMS Legal Strategies company.