Williams-Sonoma must pay almost $3.2 million for violating FTC's 'Made in USA' order
Williams-Sonoma must pay almost $3.2 million for violating FTC's 'Made in USA' order
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.
https://www.statista.com/statistics/246591/net-revenue-of-williams-sonoma-worldwide/
Once again, a corporation breaking the law can just write it off as the cost of doing business.
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.
Hey, that's not telling the whole story!
Made in the USA can mean unpaid prison slave labor too.
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.
The punishment should be calculated based on gross revenue from the product. Not net profit. 50% of gross revenue sounds good.
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.
The important part, to me, is that they must now submit annual compliance reports.
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.
Fines are not tax deductible. So no it’s not a cost of doing business.
https://www.investopedia.com/ask/answers/102915/are-irs-penalties-tax-deductible.asp#:~:text=Fines%20and%20penalties%20a%20person,federal%20laws%20are%20never%20deductible.
The conversational phrase "cost of doing business" does not mean the same thing as the tax law phrase "business expense".
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.
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.