We periodically stumble across older FTC investigations that have new relevance, and post about them as reminders. That happened recently as we get more questions about the use of recycled content and the desire to tout U.S.-based manufacturing. Although the FTC’s Enforcement Policy Statement and regulation regarding Made in USA claims do not mention how to evaluate recycled content, in a 2014 FTC Staff Advisory Opinion the Staff declined to consider the recycling process as a “new life cycle” and disregard the origin of the jewelry returned for recycling.
The requestor acknowledged that jewelry returned for recycling is often of unknown origin, but asserted that significant time and resources go into collecting recyclable material, delivering it to refiners in the United States, and processing it to a purity level of almost 100%, equating this to a “new life cycle” that resets the origin of the recycled material. Consumer perception testing submitted with the request found that 57% of respondents agreed that “Made in America” means that all parts of a product, including any natural resources it contains, originated in the United States. It also found that 33% of consumers think 100% of a product must originate in a country for that product to be designated as “Made in” that country.
In concluding that the origin of the product, prior to recycling, should be considered in the Made in USA analysis, Staff pointed to the consumer perception evidence and noted that it is highly likely that the jewelry recycled in the United States might contain components or natural resources that originated outside the United States, especially given that gold and precious minerals are often mined internationally. With that context, Staff advised that an unqualified U.S.-origin claim may deceive a significant number of consumers.
We would expect the FTC to apply a similar analysis to any recycled content, not just gold and precious minerals used for jewelry. So when making a Made in USA claim about recycled content, marketers should not only substantiate the recycled content portion of the claim consistent with the Green Guides, but also look beyond the recycling process to determine the origin of the product and its inputs before it was recycled. Unless the final assembly or processing occurred in the United States, all significant processing that went into the original product occurred in the United States, and “all or virtually all” ingredients or components of the product were made and sourced in the United States, an unqualified Made in USA claim would not be appropriate. As a reminder, the FTC has requested comments on the current Green Guides, including what they say about the use of recycled content claims. Comments are due February 21, 2023.