Williams-Sonoma to pay $3.1 million after FTC sued it, saying it falsely labeled products as 'Made in USA'

• Williams-Sonoma must pay $3.1 million after the FTC sued it over a violation. 
• The FTC requires retailers to be truthful about whether their products are made in the United States.
• FTC Chair Lina M. Khan said Williams-Sonoma used "deception."

Williams-Sonoma will pay $3.1 million after settling with the US government over accusations of falsely labeling products manufactured in foreign countries as "Made in USA."

The Federal Trade Commission and the US Department of Justice announced the home essentials company's civil penalty in press releases shared on Friday. According to the FTC and DOJ, Williams-Sonoma violated a 2020 order requiring retailers to be transparent about whether products they sell are made in the US. A July 2021 FTC press release notes that the order was implemented to discourage fraud.

The DOJ filed a complaint against Williams-Sonoma on April 24 following a referral from the FTC.

"The FTC sued Williams-Sonoma in 2020, charging that the company advertised multiple product lines under its Goldtouch, Rejuvenation, Pottery Barn Teen, and Pottery Barn Kids brands as being all or virtually all made in the USA when they were not," the press release said.

Court documents attached to the press release showed that Williams-Sonoma admitted the allegations brought forward in the complaint were true. Williams-Sonoma agreed to a settlement, which the FTC said is the largest in a "Made in USA" case so far.

The press release said the FTC learned Williams-Sonoma was advertising mattress pads at Pottery Barn Teens as "Crafted in America from domestic and imported materials" despite being made in China.

"In numerous instances, those mattress pads were wholly imported from China," the court document reads.

The FTC investigated and found six other products being falsely advertised as American-made.

Williams-Sonoma has also agreed to stop using "deceptive claims and follow Made in USA requirements," the press release said.

FTC Chair Lina M. Khan said Williams-Sonoma's business practices had a negative impact on consumers.

"Williams-Sonoma claimed its products were made in the United States even though they were made in China," she said in a statement. "Williams-Sonoma's deception misled consumers and harmed honest American businesses. Today's record-setting civil penalty makes clear that firms committing Made-in-USA fraud will not get a free pass."

The company will be required to submit annual compliance certifications.

Representatives for Williams-Sonoma did not immediately respond to a request for comment from Business Insider.

Williams-Sonoma is on the upswing despite this latest setback.

In Williams-Sonoma's Q4 and 2023 fiscal year results report, the company's president and chief executive reflected on their growth.

"We outperformed in 2023 despite the slowest housing market in several decades and geopolitical unrest. Although this pressured our top-line trend, we stayed focused on full-price selling, supply chain efficiencies, and best-in-class customer service," she wrote. "We have transformed our business model and as a result, we delivered an operating margin well ahead of our pre-pandemic profitability."

MarketBeat reported in March that the company's stock rose because of "persistent outperformance and quality business."