Platforms in the Crosshairs: What the FTC’s ‘Made in USA’ Warning Letters Mean for E-Commerce

The FTC just fired a “Made in USA” warning shot across the bow of e-commerce—this time aimed directly at the platforms themselves.

In July 2025, the agency issued letters to Amazon and Walmart, citing concerns about deceptive “Made in USA” claims made by third-party sellers on their sites (see Amazon and Walmart letters).

These types of claims have long been a focus of FTC enforcement. But the target here is different: For the first time, the FTC is warning that platforms—not just sellers—may be held responsible for false or misleading origin claims. It’s a shift every marketplace operator should take seriously.

“Made in the USA” Is More Than a Label

For many brands, “Made in the USA” isn’t just a product origin label—it’s a marketing advantage. Studies show that American consumers are often willing to pay a premium for goods made domestically, associating them with higher quality, safer materials, and fairer labor practices. That makes the claim both valuable—and tempting to misuse.

The FTC understands the power of this label, which is why it has long policed “Made in the USA” claims aggressively. For example, in 2023, a supplement company paid $1.2 million for deceptive origin claims, and in 2024, Williams-Sonoma paid $3.17 million for falsely labeling imported goods. But now, with the explosive growth of e-commerce marketplaces and their vast networks of third-party sellers, the agency is signaling that platforms themselves are responsible for helping ensure those claims are truthful and substantiated.

The Legal Standard: “All or Virtually All” (and Stricter Still in California)

Under the FTC’s standard, a product marketed as “Made in the USA” must be “all or virtually all” made domestically. That goes beyond final assembly—it includes sourcing, components, and manufacturing. Even one significant foreign-made part can render a claim deceptive. It’s not enough to imply American origin, the claim must be objectively verifiable.

This standard is now codified in the FTC’s Made in USA Labeling Rule (16 C.F.R. Part 323), and it applies to claims made on packaging, websites, advertisements, and listings on e-commerce platforms like Amazon and Walmart.

But companies selling into California face an added layer of scrutiny.

California’s “Made in USA” labeling statute (Bus. & Prof. Code § 17533.7) has historically been even stricter than the federal rule. Under current law, products labeled as “Made in USA” may contain no more than 5% foreign content—or up to 10% in limited circumstances. That higher threshold applies only when the manufacturer can show the foreign part is not available domestically, and the total foreign content stays below 10% of the product’s wholesale value.

In practice, this means a product can comply with the FTC’s federal rule yet still violate California’s more rigid standard. And that’s not just theoretical—plaintiffs’ lawyers in California have used this discrepancy to pursue class actions even when a product cleared federal regulatory hurdles.

For both platforms and third-party sellers, compliance requires a dual-lens approach: federal and California. A misstep with either standard could lead to costly litigation.

What’s Unique About These Warning Letters?

The FTC’s July 2025 letters are notable not for what they address, but who they target. For the first time, the agency is focusing its enforcement not on the third-party sellers making allegedly deceptive claims, but on the platforms that host them.

In its letter to Amazon, the FTC was explicit: “As the operator of an online marketplace, you are responsible for ensuring that claims made about products sold through your platform are not false or misleading.”Walmart received a similarly direct message: “You must take reasonable steps to prevent unqualified Made in USA claims from appearing in product listings on your site.”

In other words, it’s no longer enough for platforms to distance themselves from third-party sellers or claim neutrality. The FTC is warning that failure to monitor and police deceptive origin claims may result in platform-level liability.

This is a meaningful shift in enforcement strategy. While previous actions have focused on individual sellers, the FTC is now signaling that platforms themselves must act and not just react. That could mean:

• Enhancing automated monitoring and flagging systems
• Strengthening seller onboarding and verification procedures
• Enforcing internal policies around origin claims more aggressively

If this posture takes hold, it has important implications, not only for Amazon and Walmart, but for any company operating a digital marketplace where third parties make marketing claims.

What Should Platforms and Sellers Do?

The FTC is providing guidance as well as increasing enforcement, and businesses should not just take note but also take action.

For platform operators like Amazon, Walmart, eBay, and others:

• Review and tighten seller onboarding and product listing policies.
• Implement automated systems for flagging risky claims.
• Take swift action when complaints are raised.

For brands and third-party sellers:

• Understand the FTC’s “Made in USA” standard and ensure you can substantiate your claims.
• Avoid vague or implied patriotism—such as flag imagery—unless fully accurate.
• Audit your product listings regularly across all platforms.

Online marketplaces have transformed how we shop, how products are promoted, and made it easier for businesses to reach consumers—but also easier for misleading claims to spread. The FTC is now holding both sellers and platforms responsible for protecting the integrity of origin claims.

The warning letters may have stopped short of fines, but they’re a clear shot across the bow. Companies that wait for formal enforcement may already be too late.