The FTC recently approved a final consent order against home product and kitchen ware company, Williams-Sonoma, Inc. Under the order (available here), Williams-Sonoma is required to pay $1 million to the FTC in connection with charges that it made false, misleading, or unsubstantiated “Made in USA” claims.
The FTC first announced its compliant in March 2020, alleging Williams-Sonoma made deceptive claims in advertisements that all of its Goldtouch Bakeware products, certain Rejuvanation-branded products, and Pottery Barn Kids and Pottery Barn Teen-branded furniture is all or virtually all made in America. Below are examples from the FTC’s complaint:
Despite Williams-Sonoma’s unqualified claims, the FTC found that such products are wholly imported from outside the US or contain significant imported materials or components. Therefore, the FTC alleged that such false or unsubstantiated claims about the products’ origin deceived consumers in violation of Section 5 of the FTC Act.
Under the final order, Williams-Sonoma is prohibited from making false or misleading Made in USA claims unless:
- For unqualified Made in USA claims, Williams-Sonoma must show that (i) the product’s final assembly or processing, as well as all significant processing, takes place in US, and (ii) all or virtually all of each product’s components are made and sourced in the US.
- For qualified claims, Williams-Sonoma must include disclosures about the extent to which the products contain foreign parts, components, or processing.
- For claims that a product was assembled in the US, Williams-Sonoma must prove such product was last substantially transformed in the US, its principal assembly takes place in the US, and its US assembly operations are substantial.
Takeaway: While the FTC continues to monitor claims about a product’s US origins, advertisers should note that the FTC recently proposed updates to its “Made in USA” rule. In the future, FTC enforcement actions relating to such Made in USA claims might look a bit different, including the possibility of civil penalties for rule violations.