FTC cracks down on false "Made in USA" claims across marketplaces

On July 8, 2025, the Federal Trade Commission sent warning letters to Amazon, Walmart, and six companies regarding false "Made in USA" claims appearing on their platforms and products. The enforcement action marks an escalation in regulatory oversight of domestic origin claims across digital marketplaces.

According to the FTC announcement released on July 8, the Commission issued warnings to Amazon and Walmart about "third-party sellers who appear to be making deceptive 'Made in USA' claims about their products on those online marketplaces." The warning letters explain how truth-in-advertising laws governing domestic origin claims apply to third-party sellers operating on marketplace platforms.

The Commission simultaneously warned four direct manufacturers and retailers: flagpole retailer Americana Liberty, footwear maker Oak Street Manufacturing LLC, football equipment company Pro Sports Group LLC, and personal care products manufacturer USA Big Mountain Paper Inc. The FTC clarified that companies making false "Made in USA" claims "can expect to hear from the FTC."

Specific violations identified

The FTC letter to Amazon details multiple instances where foreign-based sellers used "Made in USA" or "100% USA Made" claims on product listings. Bureau staff received information about third-party sellers falsely advertising products as American-made despite being "based outside the United States" or having product listings that describe items as "imported."

According to the FTC documentation, violations include tactical storage plugs advertised as "Made in USA" by Hong Kong-based sellers, work boots showcased with "USA" labels by foreign sellers, and American flags marketed as "100% USA Made" by overseas sellers. The Commission noted instances where foreign sellers made conflicting statements claiming both USA and China as countries of origin for the same products.

The warnings reference Section 5 of the Federal Trade Commission Act, which prohibits unfair or deceptive practices in commerce. The Made in USA Labeling Rule, codified in 16 C.F.R. Part 323, requires that products labeled "Made in the United States" meet the "all or virtually all" standard for domestic manufacturing.

This standard means "all significant parts and processing that go into the product" must be of U.S. origin, with products containing "at most, only negligible foreign content." The Commission analyzes several factors including the proportion of manufacturing costs attributable to U.S. parts and processing, how far removed foreign content is from the finished product, and the importance of foreign content to the product's overall function.

Marketplace accountability measures

The FTC acknowledged that Amazon requires third-party sellers to adhere to specific terms and conditions before selling on its platform. The Amazon Seller Code of Conduct requires sellers to "provide accurate information to Amazon and customers at all times" while prohibiting "providing misleading or inaccurate information."

The Commission's letter to Amazon requests that the company "monitor, identify, and take corrective action against third-party sellers who make false or misleading 'Made in USA' claims on Amazon's online marketplace in violation of the FTC Act, MUSA Labeling Rule, and the Amazon Seller Code of Conduct."

Christopher Mufarrige, Director of the Bureau of Consumer Protection, signed both letters dated July 8. The letters clarify that the correspondence "does not reflect any assessment as to whether Amazon has engaged in conduct violative of the FTC Act or the MUSA Labeling Rule" and that "the Bureau is also communicating with other companies about similar conduct."

For companies found in violation of the FTC Act and Made in USA Labeling Rule, potential consequences include administrative subpoenas, federal lawsuits, injunctive relief, and civil penalties or other monetary relief. The Commission noted it has enforcement power over both unqualified "Made in USA" claims and qualified claims that describe specific amounts or types of domestic content.

Impact on digital advertising ecosystem

This enforcement action follows growing regulatory scrutiny of marketplace practices that PPC Land has tracked across multiple FTC initiatives throughout 2024 and 2025. The Commission's focus on "Made in USA" claims aligns with broader efforts to address deceptive advertising practices in digital channels.

E-commerce professionals have already begun discussing the implications across industry channels. According to LinkedIn posts from Amazon marketplace experts, sellers should expect "stepped up enforcement of these claims via Amazon detection systems" as platforms implement automated monitoring for compliance.

The timing coincides with increased emphasis on domestic manufacturing incentives. Walmart recently launched its "Grow with US" program to support American suppliers, while Amazon has been surveying sellers about tariff impacts on their operations. These initiatives reflect broader economic trends favoring reshoring and domestic production capabilities.

Marketing professionals must now evaluate how platform enforcement mechanisms will detect potentially problematic claims. Amazon's automated systems already monitor numerous seller compliance requirements, and the addition of "Made in USA" verification could impact product visibility, account suspensions, and listing removals for non-compliant sellers.

Technical compliance requirements

The FTC's guidance clarifies that qualified "Made in USA" claims must be truthful, substantiated, and clearly limited to specific processes or parts. Examples of acceptable qualified claims include "Made in USA of U.S. and imported parts," "Assembled in USA," or location-specific processing claims like "Designed in USA - Made in Finland."

Companies using "Assembled in USA" claims must demonstrate that principal assembly occurs domestically and represents substantial transformation beyond simple "screwdriver" operations. The Commission evaluates whether foreign components undergo meaningful manufacturing processes that create "a new and different product with a new name, character, and use."

The enforcement extends beyond product labeling to include advertising and promotional materials across all marketing channels, including digital and social media. Companies making domestic origin claims in advertising must ensure consistency with actual manufacturing locations and processes.

For marketplace sellers, the requirements apply equally regardless of business size or sales volume. Third-party sellers must substantiate claims with competent and reliable evidence demonstrating their products meet the "all or virtually all" standard. Relying on supplier information requires verification of domestic content percentages rather than assumptions about U.S. origin.

Broader regulatory landscape

The July enforcement reflects the FTC's systematic approach to addressing deceptive practices across digital platforms. Previous actions have targeted data privacy violations and location data misuse, demonstrating consistent regulatory pressure on technology companies to enforce compliance standards.

The Commission's emphasis on marketplace responsibility signals potential expansion of platform liability for third-party content. While the current letters focus on "Made in USA" claims, the framework could extend to other advertising standards including health claims, environmental benefits, or performance representations.

Industry observers note that automation will likely play an increasing role in compliance monitoring. Platforms must balance seller access with regulatory requirements, potentially implementing verification systems for high-risk claim categories. This technological approach mirrors developments in other regulated advertising areas including financial services and healthcare products.

The FTC's coordination with Customs and Border Protection adds complexity for international sellers. Products requiring foreign origin markings under CBP regulations cannot simultaneously claim domestic origin for marketing purposes, creating potential conflicts between trade compliance and advertising strategies.

Timeline

• July 8, 2025: FTC sends warning letters to Amazon, Walmart, and four manufacturers regarding false "Made in USA" claims
• May 3, 2025: Walmart launches "Grow with US" program supporting American suppliers amid domestic manufacturing push
• April 15, 2025: Amazon surveys sellers about tariff impacts on sourcing and pricing strategies
• January 21, 2024: FTC bans InMarket Media from selling location data, establishing precedent for marketplace oversight
• August 2021: FTC finalizes Made in USA Labeling Rule, codifying "all or virtually all" standard with civil penalty authority
• December 2, 1997: FTC publishes original Enforcement Policy Statement on U.S. Origin Claims

Key terminology explained

Substantial transformation: A legal standard defined by Customs and Border Protection that determines country of origin for imported goods. This process must result in a new and different product with distinct name, character, and use compared to the original materials. The concept becomes critical when marketers need to determine whether products can legitimately claim domestic origin despite containing foreign components. For marketplace sellers, understanding substantial transformation helps distinguish between simple assembly operations and meaningful manufacturing processes that support "Made in USA" claims.

All or virtually all standard: The foundational requirement for unqualified domestic origin claims established by FTC enforcement policy. This standard demands that all significant parts and processing occur within the United States, allowing only negligible foreign content. Marketers must evaluate manufacturing costs, processing locations, and component origins to meet this threshold. The standard differs from qualified claims that can specify partial domestic content, making it essential for advertising teams to understand which products qualify for unrestricted "Made in USA" messaging.

Truth-in-advertising laws: Federal regulations under Section 5 of the FTC Act requiring that all marketing representations be truthful, non-misleading, and adequately substantiated. These laws extend beyond traditional advertising to encompass all promotional materials including digital marketing, social media content, and marketplace listings. Violation consequences include administrative subpoenas, federal lawsuits, and civil penalties. Marketing professionals must ensure all claims can be verified through competent and reliable evidence before publication across any channel.

Third-party marketplace liability: The evolving legal framework determining platform responsibility for seller-generated content including product claims, descriptions, and advertising materials. Platforms like Amazon and Walmart face increasing pressure to monitor and enforce compliance standards among their seller communities. This liability model affects marketplace policies, seller verification procedures, and automated monitoring systems. Understanding these responsibilities helps marketers navigate platform requirements while maintaining compliant advertising practices.

Qualified versus unqualified claims: The distinction between domestic origin statements that include limitations or explanations versus those presented without conditions. Unqualified claims like "Made in USA" must meet the strict "all or virtually all" standard, while qualified claims such as "Assembled in USA from imported parts" can describe specific processes or partial domestic content. This differentiation allows marketers to make accurate statements about products with mixed origin while avoiding deceptive representations about overall manufacturing locations.

Administrative subpoena authority: The FTC's investigative power to compel companies to provide documents, testimony, and other evidence during enforcement proceedings. This authority enables the Commission to gather detailed information about manufacturing processes, supply chains, and marketing practices without requiring judicial approval. Companies receiving such subpoenas must respond within specified timeframes or face additional penalties. Marketing teams should understand this enforcement mechanism when developing documentation and substantiation procedures for advertising claims.

Civil penalty exposure: The financial consequences companies face for violating the Made in USA Labeling Rule and related FTC regulations. Unlike other FTC Act violations that typically result in injunctive relief, Made in USA violations can trigger monetary penalties from initial enforcement actions. These penalties scale based on violation severity, company size, and compliance history. Marketing budgets and risk assessments must account for potential penalty exposure when evaluating domestic origin marketing strategies.

Seller Code of Conduct compliance: Platform-specific requirements that marketplace sellers must follow regarding accurate information provision and prohibited marketing practices. These codes typically exceed basic legal requirements by establishing additional standards for product descriptions, customer communications, and advertising claims. Violations can result in account suspension, listing removal, or permanent platform bans. Marketers operating across multiple platforms must understand varying compliance standards and monitoring systems for each marketplace.

Automated detection systems: Technology platforms' algorithmic monitoring tools that identify potentially problematic content including false advertising claims, prohibited products, and policy violations. These systems analyze product listings, images, descriptions, and seller behavior patterns to flag compliance issues. Understanding detection methodologies helps marketers optimize content for platform approval while maintaining legal compliance. Systems continue evolving to address new violation patterns and regulatory requirements.

Domestic content substantiation: The evidentiary requirements marketers must maintain to support "Made in USA" and related domestic origin claims. Substantiation includes documentation of manufacturing processes, component sourcing, labor costs, and assembly locations. Companies must retain this evidence throughout the product lifecycle and update documentation when supply chains change. Effective substantiation programs combine supplier certifications, cost analysis, and manufacturing audits to demonstrate compliance with FTC standards and marketplace requirements.

Summary

Who: The Federal Trade Commission warned Amazon, Walmart, and four manufacturing companies about false "Made in USA" claims appearing on their platforms and products.

What: Warning letters addressing deceptive domestic origin claims by third-party marketplace sellers and direct manufacturers, requiring compliance with the "all or virtually all" standard for unqualified "Made in USA" representations.

When: July 8, 2025, marking an escalation in FTC enforcement of truth-in-advertising laws across digital marketplaces.

Where: The enforcement targets online marketplaces operated by Amazon and Walmart, along with products sold by flagpole retailer Americana Liberty, footwear maker Oak Street Manufacturing LLC, football equipment company Pro Sports Group LLC, and personal care manufacturer USA Big Mountain Paper Inc.

Why: The FTC cited instances where foreign-based sellers falsely claimed domestic origin for products despite being located outside the United States or listing items as imported, violating Section 5 of the Federal Trade Commission Act and the Made in USA Labeling Rule requirements for truthful, non-misleading, and adequately substantiated advertising claims.