Hunton Retail Law Resource

The FTC has made its position on violations of “Made in USA” standards clear, and Williams-Sonoma received an expensive repeat reminder. On Thursday, April 25, the agency announced a settlement with the home goods retailer, directing it to pay an unprecedented civil penalty of $3.175 million for violating a 2020 FTC order requiring the company to clearly and accurately identify which products are, in fact, made in the USA. “Made in USA” denotations, as pointed out by the FTC, are more than formality: rather, to label something as “Made in USA,” the business must adhere to specific criteria – namely, that the product’s final assembly or processing, and all significant processing, takes place in the US, and that all or virtually all ingredients or components of the product are made and sourced in the US.

The 2020 FTC order (which we reported on here) followed the its investigation into and eventual administrative proceeding against Williams-Sonoma alleging Williams-Sonoma mislabeled multiple products under different product lines as “Made in USA” when in reality the products were made overseas, often in China. Subsequently, the FTC became aware that Williams Sonoma was marketing mattress pads under its PBTeen brand as “Crafted in America from domestic and imported materials” when the pads were actually made in China. The FTC then investigated other products the company advertised as Made in USA and found those claims were also deceptive in violation of the 2020 order.

The current settlement requires Williams-Sonoma to pay $3.175 million in penalties for violating the 2020 Order, restricts the company from making unqualified Made in USA claims, sets forth clear requirements for qualified Made in USA claims, and requires the company, when claiming a product is assembled in the US, that it is last substantially transformed in the US, its principal assembly takes place in the U.S., and US assembly operations are substantial.

FTC Commissioner Rebecca Kelly Slaughter issued a statement condemning the actions taken by Williams-Sonoma but, more importantly reinforcing the FTC’s position that the “FTC’s work to deter false claims and put a stop to wrongdoers is growing steadily stronger.” Further, Commissioner Slaughter noted that the FTC will consider additional consequences when necessary, including “notice to deceived consumers and individual liability for responsible executives.” This statement, joined by Chair Lina M. Khan and Commissioner Alvaro M. Bedoya, provides further evidence of the seriousness with which FTC handles “Made in America” and other violations. The penalty imposed upon Williams-Sonoma, while in part due to the fact that it was a repeat offense, signifies the FTC’s increasing intensity in addressing violations of trade practices.

Our team at Hunton has the expertise and knowledge to assist clients to ensure compliance with the Made in USA standard.