Home products retailer Williams-Sonoma will have to pay almost $3.2 million for violating a Federal Trade Commission “Made in USA” order.
Williams-Sonoma was charged with advertising multiple products as being “Made in USA” when they were in fact manufactured in other countries, including China. That violated a 2020 commission order requiring the San Francisco-based company to be truthful about whether its products were in fact made in the U.S.
The FTC said Friday that Williams-Sonoma has agreed to a settlement, which includes a $3.175 million civil penalty. That marks the largest-ever civil penalty seen in a “Made in USA” case, the commission said.
“Williams-Sonoma’s deception misled consumers and harmed honest American businesses,” FTC Chair Lina M. Khan said. “Today’s record-setting civil penalty makes clear that firms committing Made-in-USA fraud will not get a free pass.”
In addition to paying the penalty, the seller of cookware and home furnishings will be required to submit annual compliance reports, the FTC said. The settlement also imposes and reinforces a number of requirements about manufacturing claims the company can make.
The punishment should be calculated based on gross revenue from the product. Not net profit. 50% of gross revenue sounds good.
Of course 50% of gross revenue would immediately bankrupt WSM.
But if you still think that’s an appropriate deterrent, what if we imposed the same penalty on cannabis dispensaries? After all, they are not simply violating FTC regulations, they are engaged in federal felonies.
If punishment are severe then the corporations would look twice before committing fraud and deception. If not it’s just another slap on the wrist
I think a fine of $3 million is more than a slap on the wrist. It’s a lot more than whatever benefit WSM got from “made in the USA” labels.
That’s the problem the companies don’t fear the consequences for their action. If the fine was huge enough to bankrupt a company. Then the other companies will take a second guess before committing any fraud or deception against the consumers like you and me.
And? Is a housewares store too big to fail?
No, but causing a business to fail is not necessarily the best response to a violation. I don’t want WSM to fail over “made in the USA” labels for the same reason I don’t want dispensaries to shut down.
If a dispensary lied for years about where it sourced its weed and went bankrupt due to the fines, I wouldn’t shed any tears there either.
False advertising should be given zero tolerance. And it isn’t, which is why people keep dying in Teslas using the Autopilot mode.
OK, and if the dispensary violated DEA regulations for years should it likewise be fined out of existence?
No, because that doesn’t kill people in some circumstances. Seems like a big difference.
Violating DEA regulations often kills people in some circumstances.
It’s true that a cannabis dispensary is unlikely to kill someone, but the same is true of a “Made in the USA” label.
If the specific circumstances of a violation matter for a dispensary, then they should also matter for WSM. Dispensaries don’t sell narcotics, and WSM doesn’t sell Teslas.