FTC Settles 'Made in USA' Case Against Glue Company, President for $1.2 Million
Glue manufacturer Chemence and its President James Cooke will pay $1.2 million to the Federal Trade Commission as part of a settlement in the use of deceptive “Made in USA” advertising claims, the FTC said in a Dec. 22 news release. The FTC said it is “the highest monetary judgment ever for a Made in USA case.” The agency said the company's marketing violated an FTC order that was a result of a previous settlement over the same issue after the agency sued Chemence (see 1602030032).
The FTC complaint said “Chemence and Cooke represented in promotional materials they provided to trade customers that Chemence’s private-label and other products were all or virtually all made in the United States. In doing so, they provided the means and instrumentalities for these third-party retailers to deceive consumers, the complaint alleges. Despite Chemence and Cooke’s representations, in numerous instances, foreign materials accounted for more than 80 percent of the materials costs and more than 50 percent of the overall manufacturing costs for these products.”
FTC Commissioner Rohit Chopra issued a concurring statement that celebrated stronger enforcement of “Made in USA” regulations. The action “represents a sea change from the era of no-money settlements,” he said. In this case, the FTC’s complaint “highlights false compliance reports filed by Chemence, and charges the company’s president personally for his involvement in the alleged violations,” he said. “This stands in stark contrast to other actions against repeat offenders, where the FTC granted broad releases to executives who oversaw egregious violations. The approach in this matter is far more effective.”
Chopra said that he is also pleased to see that Chemence is required to notify consumers of the action. “Notice confers benefits in cases like this,” he said. “It helps to erase any competitive advantage a firm realized through deception, and it accords consumers the dignity of knowing what happened. I have long argued we should seek notice in Made in USA and other matters.” The FTC is considering changes to its “Made in USA” regulations (see 2006230049).