Hyde Athletic Industries, Inc.; Proposed Consent Agreement With Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 922 3236]

Hyde Athletic Industries, Inc.; Proposed Consent Agreement With

Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Corrections in Analysis To Aid Public Comment.

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SUMMARY: This document contains a corrected version of the Analysis to

Aid Public Comment which was published on Friday, September 23, 1994

(59 FR 48892), in connection with a consent agreement accepted subject

to final approval by the Federal Trade Commission. The consent

agreement would settle alleged violations of federal law prohibiting

unfair acts and practices and unfair methods of competition by

prohibiting a Massachusetts footwear marketer from, among other things,

misrepresenting the extent to which any footwear is made in the United

States. It would also require the respondent to maintain materials

relied upon for any country of origin representations and to distribute

copies of the Commission order to its operating divisions and certain

company officials. The corrected version of the Analysis to Aid Public

Comment is attached.

FOR FURTHER INFORMATION CONTACT:

C. Steven Baker, Chicago Regional Office, Federal Trade Commission, 55

East Monroe St., Suite 1437, Chicago IL 60603. (312) 353-8156.

Analysis of Proposed Consent Order To Aid Public Comment

The Federal Trade Commission has accepted an agreement, subject to

final approval, to a proposed consent order from respondent Hyde

Athletic Industries, Inc.

The proposed consent order has been placed on the public record for

sixty (60) days for reception of comments by interested persons.

Comments received during this period will become part of the public

record. After sixty (60) days, the Commission will again review the

agreement and the comments received and will decide whether it should

withdraw from the agreement and take other appropriate action or make

final the agreement's proposed order.

This matter concerns country of origin claims made by the

respondent for its ``Saucony'' brand footwear, which appeared in

respondent's advertising and on labeling for certain of its footwear.

The Commission's complaint charges that respondent represented that

Saucony footwear is made in the United States, that is, that all or

virtually all of the component parts of the footwear are made in the

United States, and all or virtually all of the labor in assembling the

footwear is performed in the United States. The complaint alleges that

this claim is false and misleading because a substantial amount of

Saucony footwear is assembled in foreign countries of foreign component

parts, and a substantial amount of Saucony footwear assembled in the

United States consists largely of foreign component parts.

The proposed consent order contains provisions designed to remedy

the violations charged and to prevent the respondent from engaging in

similar acts and practices in the future. Part I of the proposed order

prohibits the respondent from misrepresenting, directly or by

implication, the extent to which any footwear is made in the United

States. This Part provides, however, that ``Made in the USA'' claims

will not violate the order if all or virtually all of the parts and

labor are of domestic origin. This Part also contains a safe harbor

provision that specifies language respondent can use when making a

country of origin disclosure for footwear that is made or assembled in

one country in whole or in part of materials made in another country.

Part II of the proposed consent order provides that the respondent

may continue to deplete its existing inventory of footwear and footwear

packaging printed or labeled prior to the date of service of this

order, provided that the respondent itself does not sell or distribute

that inventory more than ninety (90) days after the date of service of

the order.

The remaining parts of the proposed consent order require the

respondent to maintain materials relied upon in disseminating any

country of origin representations, to distribute copies of the order to

each of its operating divisions and to certain company officials, to

notify the Commission of certain changes in corporate structure, and to

file one or more compliance reports.

The standard set forth in the complaint and proposed order for an

unqualified ``Made in the USA'' (or the like) claim is that all or

virtually all of the parts and labor used in the manufacture of the

product must be of domestic origin. This standard is consistent with

Commission case precedent,\1\ certain other statutes enforced by the

Commission,\2\ and extrinsic evidence obtained by the Commission

regarding consumer perceptions of ``Made in USA'' claims. The

Commission would be interested in receiving any information relevant to

its standard for ``Made in USA'' claims, including information on the

competitive and other effects of this standard and on consumer

perceptions of country of origin claims.

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\1\See, e.g., Windsor Pen Corp., 64 F.T.C. 454 (1964); Joseph H.

Meyer Bros., 47 F.T.C. 49 (1950); Vulcan Lamp Works, Inc., 32 F.T.C.

7 (1940). The Commission's advisory opinions have also set forth

this standard. See, e.g., Advisory Opinion No. 215, Misrepresenting

Hoist as ``Made in U.S.A.,'' 73 F.T.C. 1321 (1968).

\2\Wool Products Labeling Act, 15 U.S.C. Secs. 68-68j (1973 &

Supp. 1994); Textile Fiber Products Identification Act, 15 U.S.C.

Secs. 70-70k (1972 & Supp. 1994).

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The purpose of this analysis is to facilitate public comment on the

proposed consent order. It is not intended to constitute an official

interpretation of the agreement and proposed order or to modify in any

way their terms.

Donal S. Clark,

Secretary.

[FR Doc. 94-26937 Filed 10-28-94; 8:45 am]

BILLING CODE 6750-01-M