Topline
The Federal Trade Commission has asked a judge for permission to fine luxury home goods company Williams-Sonoma $3.17 million for labeling products imported from China as "Made in the USA"—the largest penalty ever proposed for such violations.
A woman walks out of a Williams-Sonoma store on March 24, 2009 in New York, New York.
Key Facts
In a federal court filing Monday, the FTC accused Williams-Sonoma, the parent company of brands like Pottery Barn and West Elm, of labeling a total of six products as Made in the USA without disclosing that they were either processed outside of the U.S. or contained foreign components.
One such item, mattress pads sold under the Pottery Barn Teen brand, were found to be made entirely in China, the filing claims.
The FTC wants to issue its largest ever fine for such false claims—$3.17 million—which tops the $2 million it fined tractor maker Kubota North America in January for falsely labeling as domestically made replacement parts for its agricultural equipment.
Representatives for Williams-Sonoma did not respond to Forbes’ request for comment Tuesday, but did admit that the FTC allegations are true, Reuters first reported.
A spokesperson for the FTC said the agency could not comment on the Williams-Sonoma filing before the federal judge issues a response.
Crucial Quote
"When companies sow deception, they often reap law enforcement," the FTC said of its actions against Kubota.
Forbes Valuation
Williams-Sonoma was ranked No. 1,469 on Forbes' 2023 list of the world's largest companies. The brand had a total of $8.67 billion in sales last year with a $1.13 billion profit. Today, the business has a market cap of $18.21 billion.
Key Background
A 2022 survey from Retail Brew and The Harris Poll found that nearly half of American shoppers (48%) would be willing to pay a 10% to 20% premium to buy items that were made in the United States. University of Chicago researchers in 2020 found that sales fell for three of four brands that couldn't meet the FTC's Made in USA requirements, and were therefore forced to drop the label. Sales fell between 2% and 20% for those companies. The same researchers found that people are also willing to pay more for products made in America, but not so much more that it incentivises companies to move production stateside.
Tangent
President Joe Biden has cracked down on regulations defining domestic goods. In 2021, he signed an executive order that increased the threshold by which the government decides an item can be labeled “Made in America.”
Further Reading
