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Williams-Sonoma must pay almost $3.2 million for violating FTC's 'Made in USA' order

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.

TokenBoomer ,

That’s a blunder.

AtHeartEngineer ,
@AtHeartEngineer@lemmy.world avatar

I’m happy to hear the FTC is doing some shit. Seems like they kept quiet for years, but lately they’ve been on fire

JCreazy ,

I’ve never bought anything specifically because it was made in the USA because US made does not equal good quality. When I used to work retail and people would ask me if something was American made it was because they assumed it was better quality and they were racist. I do find it ridiculous that a company can do this and still be allowed to operate. William Sonoma should be forced out of business for even having the audacity to do this as far as I’m concerned.

oce ,
@oce@jlai.lu avatar

I’ve never bought anything specifically because it was made in the USA because US made does not equal good quality.

Not sure about the USA, but I consider it’s more likely the ecological and social impact of the product is better if it was made in my country than in a cheap labor one.

aniki ,

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.

THATS NOT A BRAG YOU WORTHLESS FUCKS

doc ,

It's a warning. The more that know lying will cost you millions the fewer will risk it. The more consumers who know of cheaters the more it will impact the business. Headline grabbing numbers are GOOD.

aniki ,

bullshit! -history

metaStatic ,

See also: The free market

ooterness ,

It’s not even the company’s first fine for similar misbehavior.

If the fine isn’t big enough to act as a deterrent, it’s almost like granting permission to do it again.

ooterness ,

It’s not even the company’s first fine for similar misbehavior.

If the fine isn’t big enough to act as a deterrent, it’s almost like granting permission to do it again.

Wiz ,

If you’re rich enough, a fine is never a deterrent.

FiniteBanjo ,

It is if you consider it was exactly 7 products out of everything in the brands “Goldtouch, Rejuvenation, Pottery Barn Teen and Pottery Barn Kids brands”. They’re almost certainly losing a lot more than they profited.

They broke the rules, they got fined, they broke the rules again, the fines went up and now they have to submit annual compliance reports. That seems good to me, if they do it again we fine them again and more every time.

aniki ,

Who cares if it takes a bite out of the profits for those 7 items? The company did something illegal.

FiniteBanjo ,

If they lose money by doing an illegal, and their sole motivation is to make more money, then why would they choose to keep doing it? And, this is the second time they’ve been fined and the fine is already at a new record, plus they have to submit annual compliance reports or the next fine will be another new record.

aniki ,

Did you miss the part where they made over a billion dollars in profits? Don’t bother replying – I don’t give a fuck what you think.

FiniteBanjo ,

Lmao, those 7 products did NOT make billions in profits.

aniki ,

I don’t give a shit. That’s not how justice works.

FiniteBanjo ,

It is the literal definition of Justice: if you do crime you get punished.

penquin ,

Poor them. A whole $3.2 millions? How will they ever recover from this?

breetai ,

Really depends on the value of the products sold. The find should be double or triple that to have any impact.

Personally I avoid buying anything made in China. Too much risk if it’s something I’ll touch all the time. Too much lead and chemicals in their products.

FlyingSquid ,
@FlyingSquid@lemmy.world avatar

In 2023, the global net revenue of Williams-Sonoma amounted to over 7.7 billion U.S. dollars

statista.com/…/net-revenue-of-williams-sonoma-wor…

Once again, a corporation breaking the law can just write it off as the cost of doing business.

breetai ,

Fines are not tax deductible. So no it’s not a cost of doing business.

investopedia.com/…/are-irs-penalties-tax-deductib….

quindraco ,

Tax deductibility is irrelevant; the cost of the practice pales in comparison to the profit of the practice, making the cost one of doing business.

breetai , (edited )

deleted_by_moderator

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    BakerBagel ,

    Words do have meaning. It isn’t our fault that you don’t know what those words mean.

    breetai ,

    deleted_by_moderator

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    CarbonatedPastaSauce ,

    You don’t seem to understand what “write it off” means though, which is why you’re getting piled on.

    Nobody is talking about taxes except you.

    breetai ,

    Well they should pick up a dictionary and learn what the word means.

    CarbonatedPastaSauce ,

    It’s an idiom, not a word in the dictionary. You might even notice there are three words in “write it off” if you look carefully and count them out. At this point I’m going to assume you’re just trolling but in case you want to educate yourself: idioms.thefreedictionary.com/to+write+it+off

    breetai ,

    Used in the context you claim, it’s even more of an idiotic thing to say.

    The company is being fined. It’s a real penalty. Since we don’t know how much product was sold, we don’t how punitive it is but damn, when the government gets a win you take it.

    BakerBagel ,

    The fine is inconsequential to the profit they made from lying. If stealing $10,000 from a bank was only punishable by a $500, it would be foolish not to rob the bank since you will make $9,500 in profit, writing the $500 off as an expense alongside gas money and the gun used used to hold up the teller.

    Williams & Sinoma made over $7billion in profits last year. This fine is absolutely inconsequential to them and will do nothing to discourage doing it again since the punishment is trivial to the reward.

    jumjummy ,

    What? Sure you can’t deduct them, but if I make $200 million doing something illegal, and the government catches me and fines me $10 million, then that’s just a “cost” I can account for. Make $190 million even after spending $10 million in fines.

    breetai ,

    Did they make 200 million selling those products ?

    RisingSwell ,

    7.7b in revenue for the year, probably.

    breetai ,

    On a handful of products? Doubtful.

    At least the government gave them a fine which is a step in the right direction. Country of origin is important to me. I buy based on those labels

    mox ,

    The conversational phrase “cost of doing business” does not mean the same thing as the tax law phrase “business expense”.

    breetai ,

    Write off means write off the books. Otherwise it makes no sense as that the dictionary term for the phrase. You can’t write off a fine. It isn’t “written off”.

    Real the whole paragraph. It’s idiotic talk

    mox , (edited )

    “Write off” has evolved to have an additional, more casual meaning, and I think it was clear to most of us that the author you’re referring to was using it in that sense.

    Edit: Since you’re being pedantic, I checked three dictionaries. This sense of the phrase is in all of them.

    henfredemars ,

    All I’m hearing is that made in USA is a meaningless label because it’s cost-effective to simply apply it and pay the fine if they ever get to you. Corporations mis using the label can breathe a sigh of relief. No real punishment inbound.

    Wiz ,

    Hey, that’s not telling the whole story!

    Made in the USA can mean unpaid prison slave labor too.

    FlowVoid , (edited )

    The bottom line is operating income, not revenue. And WSM had an operating income of ~$1.5 billion last year.

    The FTC found seven products were falsely advertised, starting with a mattress cover. But Pottery Barn sells over 10,000 products, in fact there are over 500 products in their bedding section alone. And Pottery Barn is just one part of WSM.

    It’s near certain that a $3 million fine wiped out whatever profit these seven products made for WSM, and then cut into profits made by other products. So breaking the law was not a profitable strategy for WSM.

    halcyoncmdr ,
    @halcyoncmdr@lemmy.world avatar

    The punishment should be calculated based on gross revenue from the product. Not net profit. 50% of gross revenue sounds good.

    FlowVoid ,

    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.

    FlyingSquid ,
    @FlyingSquid@lemmy.world avatar

    Of course 50% of gross revenue would immediately bankrupt WSM.

    And? Is a housewares store too big to fail?

    FlowVoid ,

    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.

    FlyingSquid ,
    @FlyingSquid@lemmy.world avatar

    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.

    FlowVoid ,

    OK, and if the dispensary violated DEA regulations for years should it likewise be fined out of existence?

    FlyingSquid ,
    @FlyingSquid@lemmy.world avatar

    No, because that doesn’t kill people in some circumstances. Seems like a big difference.

    FlowVoid ,

    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.

    rasakaf679 ,

    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

    FlowVoid ,

    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.

    rasakaf679 ,

    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.

    FiniteBanjo ,

    Why? We want to disincentivize malicious business practices, and fines proportional or greater to earnings from those practices are more than enough to convince a for-profit corporation to keep it clean.

    halcyoncmdr ,
    @halcyoncmdr@lemmy.world avatar

    fines proportional or greater to earnings from those practices are more than enough to convince a for-profit corporation to keep it clean.

    Lol. This is the real world, and it’s already proven that the current system is inadequate, it is not enough to stop companies from doing it.

    The fact that companies keep continuing to do it is the proof. The fines are NOT enough to disincentivize the practice. The current fines are still less than the benefit the company receives from the act, otherwise they wouldn’t be doing it.

    Bullshit like false advertising should have a dramatic punishment, not a slap on the wrist. I don’t give a shit if it bankrupts a business. A business lying to their customers should destroy it. If they want to take a chance at destroying the entire business over something as small as a fake label, they can decide to roll those dice, but don’t be surprised when they lose it all.

    FiniteBanjo ,

    As a whole you’re correct, it often is inadequate, but in this very specific case of 7 products including some teen bed-padding, then the fines seem pretty proportional.

    halcyoncmdr ,
    @halcyoncmdr@lemmy.world avatar

    It depends on how much they made from these products. If the profit from the sale of those products is more than the $3.2M in fines, it is still just a cost that can be planned for when determining sale price and margins. The penalty needs to be higher than the profit from the deceptive practice or else it’s just a cost that can be planned for, not a real deterrent.

    FiniteBanjo ,

    According to their 10-K end of year SEC Filing they made $1.7 Bn cash inflow profits, which resulted in a $1.3 Bn cash balance.

    So, hypothetically, if they had made 3.175 Million net profit on selling one of their hundreds of types of bedding products, one of thousands of types of products total, then it would be 1/500th of their total profits across their many brand names and stores, or another possible scenario would be if everything else they sold at a cost and they actually did make this much profit from this specific bedding.

    They actually saw a 9.9% decline in net revenue that year, attributed to store closures.

    FiniteBanjo ,

    I wish people would be open to changing their opinions when new information is introduced, instead they’re just downvoting you because they don’t want justice they want to be mad.

    FiniteBanjo ,

    The important part, to me, is that they must now submit annual compliance reports.

    Burn_The_Right ,

    But the fine for lying in the reports is the same as this fine: much, much lower than the profits. The fines are inconsequential, so fake reports are also inconsequential.

    The FTC has no teeth here. No one will be jailed. The fines will never be more than a fraction of a penny on the dollar. So, the required reports and even the fines mean nothing at all. Nothing. Even the bad press is likely to help them sell more goods.

    Laws without teeth are not laws.

    FiniteBanjo ,

    That’s wrong, actually. The fine they got last time was much smaller than this one, the fine they get next time can be expected to be even larger. The $3.175 Mn penalty for the 7 specific items sold with improper labeling is a new record for this specific violation.

    WhyDoYouPersist ,

    That’s like, what… The cost of three “Made in USA” Williams Sonoma credenzas?

    Zier ,
    @Zier@fedia.io avatar

    You spelled "three plastic spatulas" wrong.

    randompasta ,

    That’s why I always get my spatulas from Spatula City! In fact, if you buy nine spatulas, you get the tenth one for just one penny!

    Zier ,
    @Zier@fedia.io avatar

    Shut up!
    10 for the price of 9, hell YES!
    I am totally phoning in my order now.
    Operators are standing by you know.

    WhyDoYouPersist ,

    For real I had that written out but couldn’t remember if they sold spatulas.

    FiniteBanjo ,

    The 7 products found to be made outside of the USA probably didn’t make enough net profit to cover these fines much less the mandatory annual compliance reports.

    Keep in mind this is out of brands including “Goldtouch, Rejuvenation, Pottery Barn Teen and Pottery Barn Kids brands” which is a lot of products, so if anything this report shows they’re honest 97% of the time. To me, that’s a lot more surprising.

    catch22 ,
    @catch22@programming.dev avatar

    Now if we could only get things like I dunno leaking million peoples of private information to the dark web which adds up to billions in lost revenue and scams for millions of Americans taken as seriously… Nah…

    citrusface ,

    Oh wow a whole 3.2 million.

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