Williams-Sonoma was fined a record civil penalty of $3.175 million for violating a 2020 Federal Trade Commission order requiring the retailer to tell the truth about whether the products it sells are Made in USA.

The company, owner of Pottery Barn, was charged with advertising multiple products as being "Made in USA" when they were manufactured in China and other countries. That violated a 2020 commission order requiring the San Francisco-based company to be truthful about whether its products were made in the U.S., according to a Department of Justice complaint.

The FTC said Friday. April 26, 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.

“Williams-Sonoma claimed its products were made in the United States even though they were made in China,” said FTC Chair Lina M. Khan. “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 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 company agreed to an FTC order that required them to stop their deceptive claims and follow Made in USA requirements.

The FTC Order binds “Williams-Sonoma, Inc., also d/b/a Williams Sonoma, Williams Sonoma Home, Pottery Barn, Pottery Barn Kids, Pottery Barn Teen, West Elm, Rejuvenation, Outward, and Mark & Graham, and its successors and assigns.”

The current complaint notes that the FTC became aware that the company was marketing mattress pads under its PBTeen brand as “Crafted in America from domestic and imported materials” when it was made in China. The FTC then investigated six other products the company advertised as Made in USA and found those claims were also deceptive in violation of the 2020 order.

In addition to the civil penalty, the federal court settlement also requires Williams-Sonoma to submit annual compliance certifications, and imposes several requirements about the claims the company makes, reinforcing requirements from the 2020 FTC order:

• Restriction on unqualified claims: Williams-Sonoma will be 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 U.S. and that all or virtually all ingredients or components of the product are made and sourced in the U.S.
• Requirement for qualified claims: The company must include in any qualified Made in USA claims a clear and conspicuous disclosure about the extent to which the product contains foreign parts, ingredients or components, or processing.
• Requirement for assembly claims: The company must also ensure when claiming a product is assembled in the U.S., that it is last substantially transformed in the U.S., its principal assembly takes place in the U.S., and U.S. assembly operations are substantial.