Williams-Sonoma Settles FTC Charges of Misleading ‘Made in USA’ Claims

 

According to a recent press release by the Federal Trade Commission, Williams-Sonoma – a home products and kitchen wares company – has agreed to stop making allegedly false, misleading or unsubstantiated claims that all of its Goldtouch Bakeware, Rejuvenation-branded, and Pottery Barn Teen and Pottery Barn Kids-branded upholstered furniture products are all or virtually all made in the United States.

The San Francisco-based company, also doing business as Williams Sonoma, Williams Sonoma Home, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, West Elm, Rejuvenation, Outward, and Mark & Graham, markets its products throughout the United States, in stores and on its websites and social media platforms.

As alleged in the complaint, the company deceptively represented in advertising and promotional materials that certain categories of its products were all or virtually all made in the United States.

In 2018, the FTC received reports that Williams-Sonoma claimed in ads and promotional materials for Pottery Barn Teen organic mattress pads that those products were “Crafted in America from local and imported materials.” According to the complaint, when consumers purchased the mattress pads, they allegedly discovered that the pads, in fact, were made in China.

The FTC alleges that Williams-Sonoma corrected the country-of-origin information for the mattress pads, and agreed to comply with the FTC’s requirement that it undertake a larger review of its country-of-origin verification process. In June 2018, the FTC staff issued a closing letter.

However, the FTC alleges that since the closing letter was issued, Williams-Sonoma has made misleading claims that all Goldtouch Bakeware, Rejuvenation-branded products, and Pottery Barn Teen and Pottery Barn Kids-branded upholstered furniture products, including raw materials and subcomponents, were all or virtually all made in the United States.

The FTC alleges that these claims include:

Goldtouch Bakeware is made in America or in the USA. This claim allegedly appeared on the company’s website and in its catalogue.

In the company website and in emails, Rejuvenation-branded products are made in America or in the USA.

In a company video, Pottery Barn Teen and Pottery Barn Kids-branded upholstered furniture is made in America or in the USA.

According to the complaint, numerous Goldtouch Bakeware products, Rejuvenation-branded products, and Pottery Barn Teen and Pottery Barn Kids-branded upholstered furniture products are wholly imported, or contain significant imported materials or components. The FTC alleges that Williams-Sonoma deceived consumers with its broad claims that all items in these product lines are all or virtually all made in in the United States.

The terms of the proposed order provide that the company is 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 United States, and that all or virtually all components of the product are made and sourced in the United States. Any qualified Made in USA claims must include a clear and conspicuous disclosure about the extent to which the product contains foreign parts, components, and/or processing. To claim that a product is assembled in the United States, Williams-Sonoma must ensure that it is last substantially transformed in the United States, its principal assembly takes place in the United States, and United States assembly operations are substantial.

The proposed order also prohibits Williams-Sonoma, its officers, and any other company representatives from making untrue, misleading or unsubstantiated country-of-origin claims in their marketing materials about any product or service.

According to reports, Williams-Sonoma is required to pay $1 million to the FTC as part of the proposed settlement.

“Many of us want to buy products that are made in the USA, and we trust companies like Williams-Sonoma to tell us the truth,” said FTC attorney Andrew Smith, the Director of the FTC’s Bureau of Consumer Protection. “When a company falls short, we will hold it accountable.”

The FTC’s Enforcement Policy Statement on U.S. Origin Claims provides further guidance on making non-deceptive “Made in USA” claims. Among other things, the Policy Statement discusses both unqualified and qualified “Made in USA” claims. Unqualified claims must be supported by a “reasonable basis” for asserting that “all or virtually all” of the product is made in the United States, and qualified claims must make clear aspects of the product that are not U.S.-made, as well as be truthful, substantiated, and not misleading.

Section 5 of the Federal Trade Commission Act applies to the use of “Made in USA” and similar claims in advertising and labeling. FTC attorneys apply Section 5 to U.S.-origin claims in advertising and labeling and provide guidance on compliance. Consult with an experienced FTC lawyer prior to disseminating any U.S. origin-related claims.

Richard B. Newman is an FTC defense attorney at Hinch Newman LLP. You can find him on Twitter @FTC defense attorney and on Facebook @FTC defense attorney.

Informational purposes only. Not legal advice. May be considered advertising material.