FTC fines Kubota $2 million in largest ever ‘Made in the USA’ penalty

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Federal Trade Commission building

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WASHINGTON — The Federal Trade Commission on Friday announced that it fined Kubota, one of the world’s largest tractor manufacturing companies, $2 million for mislabeling some of its replacement parts as “Made in the USA.”

“Today’s settlement includes the largest civil penalty assessed for violating the Made in USA Labeling Rule,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “The FTC will continue cracking down on deceptive Made in USA claims that cheat consumers and honest businesses.”  

Dallas-based Kubota North America Corporation violated the 2021 rule by labeling thousands of wholly imported products or items made with significant imported materials as U.S.-made since at least 2021, according to a court order.

Many package designs featuring “Made in USA” labels also went unchanged after production of the items was shipped overseas, according to the complaint.

Kubota said in a statement that it “cooperated fully with the FTC” and is voluntarily addressing its concerns.

“All parts in this matter sold to customers since 2021 were produced by approved Kubota suppliers, and Kubota continues to stand behind these parts as ‘Kubota Genuine Parts,'” the company said.

Aside from the fine, Kubota is restricted from claiming U.S.-origin manufacturing for its products unless it can prove that significant processing occurred in the U.S. The company must also disclose when foreign parts are used in the manufacturing process.

The FTC issued a prior fine against the company in 1999 for falsely claiming that a line of lawn tractors was made in the U.S.

Established in Japan during the 19th century, Kubota has grown into a global manufacturer of tractors, construction equipment and other types of machinery. It expanded into the U.S. market in 1972 with a small office in Southern California, according to The Dallas Morning News.

The largest Made in USA settlement before Friday’s announcement involved Resident Home LLC, a company that owns several mattress brands including Nectar Sleep and DreamCloud Sleep. The company and owner Ran Reske paid $753,000 to settle FTC charges regarding imported DreamCloud mattresses that the company claimed were made with domestic materials.

Sumber: www.cnbc.com

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