Williams-Sonoma to pay $3.1 million after FTC sued it, saying it falsely labeled products as ‘Made in USA’

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• Williams-Sonoma necessity pay $3.1 million after the FTC sued it over a violation. 
• The FTC requires retailers to be truthful about whether their goods are made in the United States.
• FTC Chair Lina M. Khan said Williams-Sonoma used “deception.”

Williams-Sonoma will pay $3.1 million after settling with the US ministry over accusations of falsely labeling products manufactured in foreign countries as “Made in USA.”

The Federal Trade Commission and the US Trust in of Justice announced the home essentials company’s civil penalty in press releases shared on Friday. According to the FTC and DOJ, Williams-Sonoma disobeyed a 2020 order requiring retailers to be transparent about whether products they sell are made in the US. A July 2021 FTC swarm release notes that the order was implemented to discourage fraud.

The DOJ filed a complaint against Williams-Sonoma on April 24 walk a referral from the FTC.

“The FTC sued Williams-Sonoma in 2020, charging that the company advertised multiple product lines supervised its Goldtouch, Rejuvenation, Pottery Barn Teen, and Pottery Barn Kids brands as being all or virtually all made in the USA when they were not,” the hurry release said.

Court documents attached to the press release showed that Williams-Sonoma admitted the statements brought forward in the complaint were true. Williams-Sonoma agreed to a settlement, which the FTC said is the largest in a “Made in USA” patient so far.

The press release said the FTC learned Williams-Sonoma was advertising mattress rooms at Pottery Barn Teens as “Crafted in America from domestic and imported materials” despite being made in China.

“In numerous happens, those mattress pads were wholly imported from China,” the court document reads.

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The FTC investigated and found six other products being falsely advertised as American-made.

Williams-Sonoma has also agreed to pause using “deceptive claims and follow Made in USA requirements,” the press release said.

FTC Chair Lina M. Khan swayed Williams-Sonoma’s business practices had a negative impact on consumers.

“Williams-Sonoma claimed its products were made in the United Voices even though they were made in China,” she said in a statement. “Williams-Sonoma’s deception misled consumers and harmed truthful American businesses. Today’s record-setting civil penalty makes clear that firms committing Made-in-USA bilk will not get a free pass.”

The company will be required to submit annual compliance certifications.

Representatives for Williams-Sonoma did not immediately respond to a request for comment from Business Insider.

Williams-Sonoma is on the upswing despite this last setback.

In Williams-Sonoma’s Q4 and 2023 fiscal year results report, the company’s president and chief executive reflected on their crop.

“We outperformed in 2023 despite the slowest housing market in several decades and geopolitical unrest. Although this pressured our top-line mode, we stayed focused on full-price selling, supply chain efficiencies, and best-in-class customer service,” she wrote. “We have transmogrified our business model and as a result, we delivered an operating margin well ahead of our pre-pandemic profitability.”

MarketBeat check in in March that the company’s stock rose because of “persistent outperformance and quality business.”