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Federal Register / Vol. 86, No. 132 / Wednesday, July 14, 2021 / Rules and Regulations
would leave American consumers unprotected. 21 Accordingly, TINA.org concluded, as a matter of statutory interpretation, the Commission can regulate digital MUSA labels. As a matter of consumer protection, the Commission ought to regulate digital MUSA labels. 22
The Southern Shrimp Alliance SSA and AAM agreed, arguing Congress made an affirmative decision to defer to the FTC when it removed a definition of labels that appeared in initial drafts of the legislation.23
Moreover, AAM argued the text of Section 45a specifically authorizes coverage of electronic labels because of the words the equivalent thereof in the phrase authorizing coverage of products introduced into commerce with a Made in the U.S.A. or Made in America label, or the equivalent thereof. 24 AAM argued the phrase refers to the equivalent of introducing a product into commerce with a label, i.e., making a claim on a website.25
In contrast, four commenters asserted the proposed rule exceeds the scope of the Commissions rulemaking authority under Section 45a.26 CRN and PCPC
argued Section 45as consistent use of the term label demonstrates Congresss intent to authorize a rule limited to labels on products, not one that would cover advertising generally.27 An anonymous commenter argued Section 45a does not provide authority to regulate claims in mail order advertising materials as proposed in Section 323.3, so the proposed rule should be revised to only cover labels on products. 28 Should the FTC finalize a rule that purports to cover more than labels on products, NAM warned, the result could be lengthy litigation , which would leave manufacturers and consumers alike . . . without clear guidance at a time when manufacturers need as much regulatory certainty as 21 Id.

at 5.
at 3 emphasis in original.
23 Southern Shrimp Alliance 380; AAM 611.
24 AAM 611. Coalition for a Prosperous America 625 agreed Section 45as plain language permits coverage of electronic claims arguing coverage is authorized where a substantial part of the product is of domestic origin citing Section 45a To the extent any person introduces, delivers for introduction, sells, advertises, or offers for sale in commerce a product with a Made in the U.S.A. or Made in America label, or the equivalent thereof, in order to represent that such product was in whole or substantial part of domestic origin, such label shall be consistent with decisions and orders of the Federal Trade Commission issued pursuant to section 45 of this title emphasis added..
25 AAM 611.
26 CRN 569; PCPC 587; Anonymous Anonymous 592; NAM 623.
27 PCPC 587; CRN 569.
28 Anonymous Anonymous 56.

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possible. 29 Given these concerns over the scope of the Commissions rulemaking authority, Shirley Boyd stated the Commission should proceed pursuant to the Magnuson Moss Warranty-Federal Trade Commission Improvements Act to issue a broader rule covering MUSA advertising generally.30
2. Analysis After reviewing the comments, the Commission has concluded proposed Section 323.3 falls within the scope of its authority under Section 45a. As described above, Section 45a authorizes the Commission to issue rules to govern labeling of products as Made in the U.S.A. or Made in America, or the equivalent thereof. Section 45a specifies: to the extent any person introduces, delivers for introduction, sells, advertises, or offers for sale in commerce a product with a Made in the U.S.A. or Made in America label, or the equivalent thereof, in order to represent that such product was in whole or substantial part of domestic origin, such label shall be consistent with decisions and orders of the Federal Trade Commission. The Commission is empowered to ensure such labels are consistent with decisions and orders of the Federal Trade Commission defining unfair or deceptive acts or practices under Section 5. The Commission agrees with SSA and AAM that Congresss removal of a definition of label from Section 45a before its passage strongly suggests Congress deliberately chose to defer to the FTCs interpretation of the term in the context of MUSA claims.31 Moreover, the Commission agrees with TINA.org that digital and physical labels are functionally equivalent, especially with the growth of e-commerce, and a failure to cover labels in print or electronic mail order catalogs or promotional materials would leave consumers without much-needed protection.32
The final rule does not cover MUSA
claims in all advertising. Instead, as Section 323.3 explains, the rule covers labels appearing in all contexts, whether, for example, they appear on product packaging or online. With this clarification, the Commission adopts Section 323.3 as proposed.
B. All or Virtually All Standard As described in Section I above, the NPRM proposed to codify the Commissions longstanding
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29 NAM

623 at 5.
Boyd 6.
31 Southern Shrimp Alliance 380; AAM 611.
32 See TINA.org 369.
30 Shirley
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interpretation of Section 5s requirements governing substantiation of unqualified MUSA claims. This interpretation was first articulated in Commission cases dating back to the 1940s 33 and was formalized in the 1997
Policy Statement. Specifically, the NPRM proposed to prohibit unqualified MUSA claims on labels unless: 1 Final assembly or processing of the product occurs in the United States, 2 all significant processing that goes into the product occurs in the United States, and 3 all or virtually all ingredients or components of the product are made and sourced in the United States.
Although many commenters, particularly those with interest in food products, supported the decision to incorporate the all or virtually all guidance, others raised concerns. In particular, commenters questioned whether the all or virtually all standard represents current consumer understanding of MUSA claims. Some proposed alternative standards for consideration.
After analyzing these comments, as discussed below in Section II.B.3., the Commission has determined it has a reasonable basis to adopt the longstanding all or virtually all standard, and the rule provides appropriate and clear guidance to marketers.
1. Consumer Perception Testing Six commenters argued the FTC
should conduct new consumer perception testing before codifying the all or virtually all guidance into a rule.34 They noted the Commission has not conducted comprehensive testing since the 1990s. CRN explained codifying a standard for unqualified U.S.-origin claims that is based on consumer perception data that has not been reanalyzed by the Commission in over 20 years is potentially problematic because given significant changes to the global economy, consumer perceptions of U.S.-origin claims are very likely to have changed over time and consumer perception in 1997, and even 2013, could be very different from how consumers perceive U.S.-origin claims today. 35 CTA agreed and asserted that proposing to codify the all or virtually standard without conducting new consumer perception 33 See, e.g., In re Vulcan Lamp Works, Inc., 32
F.T.C. 7 1940.
34 CRN 569; Consumer Technology Association CTA 579; Global Organization for EPA and DHA Omega-3s 604; American Association of Exporters and Importers AAEI 605; NAM
623; Pharmavite LLC 695.
35 CRN 569.

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