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Kubota North America Corp, a subsidiary of Japanese agricultural machine maker Kubota Corp, is set to pay a record $2 million penalty for deceptive “Made in USA” labelling on thousands of replacement parts.
The Federal Trade Commission revealed that the company falsely claimed the parts were produced in the United States, despite being manufactured overseas. The $2 million penalty is the largest ever imposed for such deceptive labelling, underscoring the significance of accurate country-of-origin information.
The FTC’s investigation revealed that Kubota North America Corp had labelled thousands of replacement parts for its tractors and other agricultural equipment as being produced in the United States, starting at least in 2021. However, contrary to these claims, the parts were manufactured overseas.
The deceptive labelling occurred when Kubota moved the manufacturing of certain parts outside the United States. Despite this shift in production, the company failed to update the labels on these products to accurately reflect their country of origin. This failure to provide accurate information to consumers led to the imposition of the $2 million penalty.
Accurate country-of-origin labelling is crucial for consumers who make purchasing decisions based on the belief that they are supporting domestically produced goods. False claims of “Made in USA” can mislead consumers and create an unfair advantage for the company making such deceptive assertions.
The $2 million penalty underscores the seriousness of deceptive labelling practices and the FTC’s commitment to holding companies accountable for accurate country-of-origin information. The record-setting nature of this penalty serves as a strong deterrent against misleading consumers and reinforces the importance of transparent and truthful labelling in the marketplace.
Kubota North America Corp is expected to take corrective measures in updating its product labels to accurately reflect the manufacturing origin of replacement parts. The case serves as a reminder to companies to ensure that their labelling practices align with the actual production locations of their goods, preventing misleading claims and potential legal consequences.