On Friday, the Federal Trade Commission announced that it reached a $2,000,000 settlement with tractor maker Kubota North America Corporation, resolving allegations that the company falsely labeled some its replacement parts as being “Made in USA.”  The FTC said this was the largest-ever civil penalty that the FTC has assessed for violating the FTC's “Made in USA” standards.

In its announcement of the settlement, Samuel Levine, Director of the FTC's Bureau of Consumer Protection, said, “The FTC will continue cracking down on deceptive Made in USA claims that cheat consumers and honest businesses.”  

In the case, the FTC alleged that Kubota labeled thousands of replacement arts as having been made in the United States, even though they were wholly imported.  The FTC also alleged that the company failed to update the labeling on other products, after the production of those products was shifted overseas. 

According the FTC's Enforcement Policy Statement on U.S. Origin Claims, in order for an advertiser to claim that a product is of U.S.-origin, the product must be “all or virtually all” made in the United States.   This standard was also recently codified in the FTC's Made in USA Labeling Rule.