The FTC recently announced that it looked into whether Whiteside Machine & Repair Company may have overstated the extent to which its products, including router bits, are made in the United States. The FTC said that it was concerned about Whiteside's claims because, even though the company performs some functions in the United States, many of its products contain significant important components.
According to the FTC's Enforcement Policy Statement on U.S. Origin Claims, unqualified U.S.-origin claims in marketing materials communicate to consumers that the advertised products are "all or virtually all" made in the United States. The FTC analyzes a number of factors to determine whether a product was actually made here, including the proportion of the product's total manufacturing costs attributable to U.S. parts and processing and how far removed any non-U.S. content is from the finished product. Where a product isn't "all or virtually all" made here, then the FTC says marketers should qualify the claim to avoid any consumer deception about the amount of foreign content in the product.
The FTC decided not to take action against Whiteside after the company undertook significant remedial action, including stickering over outdated claims on product packaging, updating online marketing materials, and printing new advertising and packaging materials. In addition, the company sent a detailed communication to its retailers requiring them to sticker over inaccurate claims on packaging, remove potentially deceptive point of purchase materials, and update dealer-controlled online materials, including social media content.
In closing its investigation, the FTC that although it is acceptable for Whiteside to promote the fact that it is American-owned, employs workers in the U.S., and performs certain processes in the U.S., the company must ensure that it does not overstate the extent to which products are made here.