- Williams-Sonoma must pay $3.1 million after the FTC filed suit citing violations.
- The FTC requires retailers to be honest about whether their products are made in the United States.
- FTC Chair Lina M. Khan said Williams-Sonoma used “deception.”
Williams-Sonoma will pay $3.1 million in a settlement with the U.S. government for falsely labeling foreign-manufactured products as “Made in the USA.”
The Federal Trade Commission and the U.S. Department of Justice announced the civil penalty against the household products company in a press release shared on Friday. According to the FTC and Department of Justice, Williams-Sonoma violated a 2020 order requiring retailers to be transparent about whether the products they sell are made in the United States. A July 2021 FTC press release states that the order was implemented to deter fraudulent activity.
The Department of Justice filed a complaint against Williams-Sonoma on April 24 after receiving an inquiry from the FTC.
“The FTC sued Williams-Sonoma in 2020, alleging that the company promoted multiple product lines under its Goldtouch, Rejuvenation, Pottery Barn Teen, and Pottery Barn Kids brands as if they were all or virtually all made in the United States. Even if it was, that’s actually not the case.” the press release said.
Court documents attached to the press release indicated that Williams-Sonoma acknowledged that the allegations raised in the complaint were true. Williams-Sonoma agreed to a settlement that the FTC said was the largest “Made in USA” case to date.
The FTC has learned that Williams-Sonoma advertises mattress pads at Pottery Barn Teens as “Made in the USA from domestic and imported materials” even though they are made in China, according to a press release. Ta.
“In many cases, all of these mattress pads were imported from China,” court documents state.
The FTC investigated and found six other products falsely advertised as made in the United States.
Williams-Sonoma also agreed to “cease the use of misrepresentations and comply with Made in the USA requirements,” the press release states.
FTC Chair Lina M. Khan said Williams-Sonoma’s business practices are having a negative impact on consumers.
“Williams-Sonoma claimed that their products were made in the United States even though they were made in China,” she said in a statement. “Williams-Sonoma’s deception misled consumers and harmed honest American companies. Today’s record civil penalties mean companies committing Made in USA fraud will not be given a free pass.” It revealed that.”
Companies must submit a compliance certificate annually.
Representatives for Williams-Sonoma did not immediately respond to Business Insider’s request for comment.
Despite this setback, Williams-Sonoma is on the rise.
In Williams-Sonoma’s fourth quarter and fiscal year 2023 earnings report, the company’s president and chief executive officer reflected on his company’s growth.
“Despite the weakest housing market in decades and geopolitical instability, we outperformed in 2023. This weighed on our sales trends, but we continued to improve our list price and supply chain “We remained focused on efficiency and best-in-class customer service,” she said. I have written. “We transformed our business model and as a result, we achieved operating margins that significantly exceeded pre-pandemic profitability.”
MarketBeat reported in March that the company’s shares rose thanks to “continued outperformance and high-quality operations.”
