SAN FRANCISCO — Top 100 retailer Williams-Sonoma, Inc. agreed to pay more than $3 million for violating a 2020 FTC consent order requiring it to tell the truth about whether the products it sells are made in the USA.

The FTC is calling the $3.175 million fine a “record civil penalty” for violating the 2020 order, which was approved after Williams-Sonoma reached a $1 million settlement with the commission earlier that year.

The San Francisco-based retail group, which includes Pottery Barn and West Elm among its brands, was the subject of a complaint filed by ad watchdog truthinadvertising.org. Last July, TINA.org filed a complaint with the FTC based on a tip from a consumer who purchased a Pottery Barn Teen mattress pad advertised online as “crafted in America from domestic and imported materials.” The consumer said she bought the mattress pad specifically because she did not want one made in China. But TINA.org independently verified the mattress pad advertised as “crafted in America” was labeled “made in China” upon arrival.

The FTC then investigated six other products the company advertised as “made in USA” and found those claims were also deceptive in violation of the 2020 order.

“Williams-Sonoma claimed its products were made in the United States even though they were made in China,” said FTC Chair Lina M. Khan. “Williams-Sonoma’s deception misled consumers and harmed honest American businesses. Today’s record-setting civil penalty makes clear that firms committing made-in-USA fraud will not get a free pass.”

The FTC sued Williams-Sonoma in 2020, charging that the company advertised multiple product lines under its Goldtouch, Rejuvenation, Pottery Barn Teen and Pottery Barn Kids brands as being all or virtually all made in the U.S. when they were not. The company agreed to an FTC order that required it to stop deceptive claims and follow made in USA requirements.

In addition to the civil penalty, the federal court settlement also requires Williams-Sonoma to submit annual compliance certifications and imposes several requirements about the claims the company makes, reinforcing requirements from the 2020 FTC order:

• Restriction on unqualified claims: Williams-Sonoma will be prohibited from making unqualified U.S.-origin claims for any product, unless it can show that the product’s final assembly or processing — and all significant processing — takes place in the U.S., and that all or virtually all ingredients or components of the product are made and sourced in them U.S.
• Requirement for qualified claims: The company is required to include in any qualified Made in USA claims a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients or components, or processing.
• Requirement for assembly claims: The company must also ensure, when claiming a product is assembled in the U.S., that it is last substantially transformed in the U.S., its principal assembly takes place in the U.S., and U.S. assembly operations are substantial.

See also:

• Revenues slip YOY for Q4 and FY, but Williams-Sonoma tops expectations
• FTC fires legal shot at company for made in the USA labeling fraud; who’s next?

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