WASHINGTON, D.C. — Tractor manufacturer Kubota North America Corporation has been hit with a $2 million civil penalty for falsely labeling its replacement parts as “Made in USA.” This action, brought by the Federal Trade Commission (FTC), marks the highest civil penalty ever in a Made in USA case.
The Department of Justice filed a stipulated court order on behalf of the FTC, which Kubota agreed to. The order prohibits Kubota from making deceptive claims and imposes the hefty penalty.
“Today’s settlement includes the largest civil penalty assessed for violating the Made in USA Labeling Rule,” stated Samuel Levine, Director of the Bureau of Consumer Protection. He added, “The FTC will continue cracking down on deceptive Made in USA claims that cheat consumers and honest businesses.”
According to the complaint, Kubota had been falsely labeling thousands of replacement parts for its tractors and other agricultural equipment as Made in USA since at least 2021, even though they were entirely manufactured overseas. Kubota also failed to update product labels after shifting manufacturing for some parts to other countries, leaving them inaccurately labeled as “Made in USA.”
This isn’t the first time Kubota has faced legal action from the FTC. In 1999, the company was sued for falsely claiming that a line of lawn tractors it manufactured was Made in USA. An FTC order in that case expired in 2019.
The stipulated order against Kubota includes several requirements. The company is prohibited from making unqualified U.S.-origin claims for any product unless it can demonstrate that the product’s final assembly or processing—and all significant processing—takes place in the U.S. Furthermore, all or virtually all ingredients or components of the product must be made and sourced in the U.S.
If Kubota makes any qualified Made in USA claims, it must clearly disclose the extent to which the product contains foreign parts, ingredients, or components, or processing. And if the company claims a product is assembled in the U.S., it must ensure that it is last substantially transformed in the U.S., its principal assembly takes place in the U.S., and U.S. assembly operations are substantial.
The FTC emphasized its commitment to ensuring that “Made in USA” claims are truthful. Its Enforcement Policy Statement on U.S. Origin Claims provides guidance on making non-deceptive “Made in USA” claims. The FTC’s Made in USA Labeling Rule, which took effect on Aug. 13, 2021, explicitly states that companies violating the Rule may be subject to civil penalties.
For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News and MSN.