Dr. Moxa sells masks on Amazon. They say they are made in the U.S. They are not. They are made in China, according to the smart guys at Cultivate.
The Federal Trade Commission has caught wind of all this and said this week that companies labeling their products falsely as domestic goods will finally be subject to fines.
Every violation will be subject to civil penalties of as much as $43,280, the FTC said in a statement on July 1. The new rule requires marketers of Made in the U.S.A. labels to prove that their products are “all or virtually all” made here.
The rule essentially codifies guidance and existing recommendations by the FTC. Now breaking those guidelines will lead to a fine. For smaller, international players using fake labels and listing on Amazon, this should lead them to be honest in their labeling, the regulator believes.
“For decades, there has been a bipartisan consensus among commissioners that Made in USA fraud should not be penalized,” FTC Commissioner Rohit Chopra, said in the press release on Thursday. “In my view, this policy posture was in direct contravention of both the letter and spirit of the law Congress enacted.”
The rule was first proposed in June 2020.
The public was “overwhelmingly” supportive of stricter enforcement, the FTC said.
Ranchers and shrimpers, who have long complained that deceptive labeling hurts business, also backed the move. After the FTC’s decision, Agriculture Secretary Tom Vilsack said his department is reviewing the “Product of USA” label.
“I hope the USDA will study the FTC’s rulemaking record carefully and come to the same conclusion I have: the USDA’s Product of USA standard is misleading and distorts competition,” Chopra said.
CPA supports legislation that would allow for beef to be labeled as raised and processed in the U.S., rather than just USDA approved. As it is now, beef born and raised from Mexico to Australia is USDA approved, giving American consumers a false sense that the cattle were raised on an American ranch.
“We are pleased to see the FTC move that takes action against companies falsely labeling their goods as Made in America,” says CPA CEO Michael Stumo. “Even the Chinese know that the USA-made designation is valuable because they would not bother with the fraud otherwise. Congress has a chance, with the Country of Origin Labeling (COOL) Online Act, to further fix this problem by requiring Amazon and e-commerce sites to prominently display the country of origin of goods.”
Should Big Retail be required to note where their products are made? If you think so, sign our petition and tell Congress you support the COOL Online Act.