This story has been edited to include a statement from Kubota.
Kubota North America is facing a $2 million civil penalty after misrepresenting the origins of some of its replacement parts for tractors and other agricultural equipment, per a Department of Justice court order.
The civil penalty follows a complaint by the Federal Trade Commission (FTC), which alleged that, since at least 2021, Kubota falsely labeled thousands of wholly imported replacement parts as “Made in USA.” The agency also accused Kubota of not updating product labels that included recently outsourced parts.
According to the FTC, Kubota’s acts led to the company selling millions of mislabeled parts that were wholly imported.
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The $2 million penalty, which Kubota has agreed to pay to the U.S. Treasury, will serve as the largest for a Made in USA Labeling Rule violation. The stipulated order also prohibits Kubota from making unqualified origin claims for products unless it can prove the product meets labeling rule conditions.
The Made in USA Labeling Rule took effect in August 2021 and states that a product can only carry the label if it adheres to a series of requirements. The product’s final processing or assembly and all significant processing must take place in the U.S. Additionally, all, or virtually all, of the product’s components or ingredients must be made and sourced in the U.S.
The latest violation comes nearly five years after the expiration of a 1999 FTC order that accused Kubota company subsidiary Kubota Tractor Company of violating the FTC Act. The FTC alleged that the subsidiary advertised garden and lawn tractors as “Made in the United States” despite containing significant imported parts.
Kubota responded to a request for comment and said:
Kubota North America Corporation has settled with the FTC over its Made in USA Labeling Rule. The company paid a $2 million penalty to resolve allegations that the packaging of some replacement parts for tractors and other products sold in the U.S. incorrectly identified the country of origin of those parts as 'Made In USA,' when, in fact, those parts were made elsewhere.
Kubota North America has cooperated fully with the U.S. government throughout this investigation and is voluntarily addressing the FTC's concerns. Kubota North America is committed to complying with the law and the FTC's regulations with respect to 'Made In USA' advertising and labelling. Together, with its U.S. subsidiaries, Kubota North America has implemented policies and process improvements, including regular reviews of our supplier information, regarding the accuracy of such labels on all Kubota Genuine Parts. 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.'
Kubota regrets that this matter has occurred. But we recognize that our company, our process, and our business have been improved by sincerely learning from this matter. Kubota will continue to take steps to improve and enhance our commitment to compliance.