[HN Gopher] Williams-Sonoma fined $3.18M for falsely labeling pr...
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Williams-Sonoma fined $3.18M for falsely labeling products 'Made in
USA'
Author : randycupertino
Score : 159 points
Date : 2024-04-28 18:03 UTC (4 hours ago)
(HTM) web link (www.scrippsnews.com)
(TXT) w3m dump (www.scrippsnews.com)
| randycupertino wrote:
| It's not the first time- The Federal Trade Commission said the
| retailer violated a 2020 order it settled that made the same
| allegations.
|
| Here is the 2020 order it got in trouble over originally:
| https://www.ftc.gov/news-events/news/press-releases/2020/07/...
| hinkley wrote:
| Hopefully they multiply the fines by pi every time they repeat
| the violation. "You want to make it 10M?" in angry dad voice.
| sahila wrote:
| What's special about pi? That's just a 3x multiplier, seems
| more appropriate it should be an exponential fine increase to
| strongly deter repeat fines.
| heyoni wrote:
| Funny, I just reported them to the FTC for not allowing me to
| unsubscribe from their mailing lists despite never opting in.
| blackeyeblitzar wrote:
| This is one of the problems with current legislation (CAN
| SPAM). My understanding is that individuals don't have
| standing to sue, but instead all they can do is report issues
| to the government and hope they do something about it.
| lldb wrote:
| Yep. And even worse states aren't allowed to give
| individuals standing to sue either under the preemption
| clause (expect for in cases of deceptive advertising via
| email).
| Simulacra wrote:
| This always bugged me about Harley Davidson, because only around
| 70 to 80% of the parts are made in America. Most of Harley-
| Davidson's sold across the globe are made outside of America.
| Yet.. it's "Made in America" when in fact it's just assembled
| here. Always felt that was dishonest but IIRC they use a special
| loophole
| bugbuddy wrote:
| The easy fix for this is to use a nutrition style labeling for
| origin. Just list the origin of each part. Problem solved.
| readyman wrote:
| Easy? Maybe it seems that way if you know nothing whatsoever
| about American politics.
| kbenson wrote:
| Almost no vehicle manufacturers make all their own parts, and
| vetting the source of every part to make sure also were all
| made in the states would just mean that some parts are
| unavailable.
|
| Also, its important to think of the other side of the made in
| the U.S.A. label which was to bring foreign manufacturers to
| the states for our market. Think Honda and Toyota. Getting the
| majority of the parts made here and the assembly here was a
| major benefit to those areas it affected compared to having
| that all happen in Japan. If you required 100% or close to it,
| would that have even happened?
|
| There are both positives and negatives to the current system,
| but in a global market I'm not sure it's sane to expect complex
| products with many parts to have a single national origin.
| KennyBlanken wrote:
| Nobody is "expecting complex products with many parts to have
| a single origin." And normally I'd agree that Made In the USA
| is diet xenophobia, but Harley specifically, and heavily,
| lean into being "made in the USA" - as do their owners, and
| certain politicians who introduced tariffs (and caused
| retaliatory tariffs in the EU. Which Harley sidestepped by,
| drumroll please...opening assembly plants in southeast Asia!)
|
| Some engine components, some drivetrain components, all the
| electricals, all the suspension, and wheels are all made
| outside the US. That leaves the frame/body panels and some
| engine/drivetrain components as the only stuff sourced in the
| US - and yes, the engine/bike assembled in the US.
| mindslight wrote:
| To do this right you'd have to set up something like a VAT
| style system where each vendor in the tree specifies how much
| of the value of their product was produced in the US.
| Otherwise the obvious incentive is to import the largest
| subassemblies you can, with perfunctory final assembly in the
| US.
|
| Then again this would give foreign made products a running
| start (Amazon Chineseum that's 3x the cost of Aliexpress -
| 70% made in the US!), and it would probably be only that last
| 20-30% that actually resulted in domestic blue collar jobs
| which are the ostensible desire of such labeling.
| londons_explore wrote:
| This is done, but it's pretty easy to game by pricing parts
| 'unusually'. Especially when it is a subsidary of your own
| company producing the parts overseas, you can decide if ECU
| control circuit boards are worth $1 or $1000.
|
| And you would be able to produce paperwork and find experts
| who would value it at either, or anywhere in the middle.
| (since there is no market price for highly specialist
| circuit boards which can't be sold to anyone else).
| mindslight wrote:
| I'd say there's a hard floor for the cost of board
| components plus the labor/management of assembling them.
| But yes I can imagine fraud being generally rampant. It
| does make you think though, now that we've got such
| computation and communication capabilities - if creating
| and publishing such kinds of reports became mandatory,
| such that individual consumers could benefit from a lot
| more analysis on what they're buying rather than the mere
| final price.
| damontal wrote:
| I guess it depends on what you mean by "made"
| karaterobot wrote:
| If 4 out of 5 parts were made in the country, and the bike was
| assembled in the country, it does not bother me to claim the
| bike is made in the USA. For a complex assembly with hundreds
| or thousand of pieces, there's some wiggle room, and 70-80% is
| close enough that I wouldn't feel lied to.
|
| On the other hand, if I bought a wooden spoon, or even a
| saucepan, and it said "Made in USA" on it, and I found out that
| it wasn't 100% made in the USA from materials produced here,
| I'd feel differently because those are relatively simple
| products (compared to a motorcycle) where every piece much more
| crucially defines the whole.
|
| I don't know what the cutoff is, though: a product doesn't have
| to be 100% USA-made components, but 51% would be too little.
| Ballpark, 70%+ would be the over-under where I'd start to feel
| misled.
| rootsudo wrote:
| Does it count as made in USA if said HD motorcycle has
| software, made, in, India?
|
| How about designers not in USA?
| jjtheblunt wrote:
| That reminds me of Apple's "Designed in California" on some
| products.
|
| (My 2016 Mac Pro also said Made in the USA, as it was in
| Texas.)
| karaterobot wrote:
| On a motorcycle? Not to me. Maybe to others. I would
| interpret the "made" in "made in USA" as referring
| specifically to the manufacturing of the physical bike.
| jrexilius wrote:
| I've run into this problem trying to build hardware in the
| US[1]. There are certain components where it's just not
| possible to find them in the US. But that is as a start-up.. as
| a company the size of Harley, they certainly could design and
| commision them here if they wanted.
|
| [1] https://www.anomie.tech/articles/making-hardware-in-the-US/
| coolhand2120 wrote:
| What part do you consider to be critical enough in the act of
| making you call it "made here"? Virtually nothing is wholly
| made in any one place. Even poetry relies on the paper and
| pencil industry.
| geor9e wrote:
| Are any brands better? Looks like the only car squeaking over
| 80% is Tesla on this big table
| https://kogod.american.edu/autoindex/2023
|
| It's very difficult being a Mechanical Engineer trying to
| source American parts. America just doesn't have the
| infrastructure for a lot of things you need. And even when it
| does, often you find China can do it better, faster, and
| cheaper. I can get a box of CNC machined parts for $10 each via
| 2 day DHL for a $200 shipping fee. An America shop would take
| just as long and charge me a couple hundred bucks for just one.
| And try finding some niche bearing on mcmaster-carr if you
| filter by USA, nearly the entire catalog disappears. A global
| supply chain is just the reality of mass producing machines
| these days. And imports can only have one Country of Origin so
| we can't be too detailed on the labels.
| hk1337 wrote:
| Rule of Acquisition #239 - Never be afraid to mislabel a product.
| PontifexMinimus wrote:
| Especially when any fine will be merely a rap on the knuckles.
| From the article:
|
| > the company raked in nearly $8.7 billion in sales last year.
| _heimdall wrote:
| > It's interesting to question, however, if U.S.-made labels
| have at all contributed to the company's success.
|
| The article did follow up the total sales number with this
| caveat though. It seems reasonable that the products could
| have accounted for more than $3.18M in sales, though we
| really don't know total sales of the falsely labeled products
| _or_ what percent of those sales only happened due to the
| Made in the USA label.
| thaumasiotes wrote:
| > we really don't know total sales of the falsely labeled
| products _or_ what percent of those sales only happened due
| to the Made in the USA label.
|
| We can speculate about that second question, though. Have
| you ever made a purchase decision based on a country-of-
| origin label?
| wccrawford wrote:
| I'm not sure why you're being downvoted for that. It was
| part of Walmart's early success that they sold products
| made in America, and there was a long time that people
| griped about it no longer being true. Clearly people
| care.
| Tagbert wrote:
| The question may have come off as implying that people do
| not made buying decisions based on the country of origin
| label. I imagine that many people's own buying habits
| show them that the label does have an impact.
| wccrawford wrote:
| I took it the opposite way (that it implied they _do_
| make decisions based on that info) but I guess it could
| be interpreted either way.
| mostlysimilar wrote:
| Personally I will spend significantly more to buy made in
| America.
| _heimdall wrote:
| From William-Sonoma specifically? No, I haven't. In
| general, absolutely though in those instances I end up
| always buying from a smaller company as well that
| actually produces the product.
|
| I'll buy USA-made jeans from Round House for example, but
| it wouldn't make a difference to me if I saw a sticker in
| a big chain store selling jeans.
| vundercind wrote:
| MIUSA is a good marker of quality for many products--not
| because US workers or processes are exceptional in ways
| that those in poorer countries can't be, but because US
| manufacturing has high labor costs, so it doesn't make
| sense to cut corners that it might in other countries,
| because you're already not able to chase the very-price-
| sensitive market.
|
| For example, it's rare to see shoes made in the US (or
| other rich countries, for that matter) that are made with
| anything worse than mid-tier full grain leather, because
| what's the point? If you use US manufacturing to make
| crappy bonded or corrected leather shoes, you're just
| going to have the most-expensive crappy shoes on the
| market, so why bother?
|
| There are exceptions, but it's a decent signal.
| TheCleric wrote:
| I feel like that was the weakest part of the article. I
| don't particularly find that to be an interesting question
| in this context because it's a bit irrelevant if it works.
| What matters is whether they think it works, and whether
| it's a worthwhile exchange for them to lie to increase
| sales with the hope/knowledge that it will be profitable in
| the long term.
| thaumasiotes wrote:
| I'm always amused by the meme image that fused "low quality
| copper ingots" with "virgin vs chad". https://i.kym-
| cdn.com/photos/images/original/002/042/283/f27...
|
| "Sorry, no refunds."
| fullshark wrote:
| My god it's actually a real one, kudos
|
| https://memory-alpha.fandom.com/wiki/Rules_of_Acquisition
| bequanna wrote:
| Cool, so to summarize the fine:
|
| - The size is so small it is essentially meaningless to the
| company.
|
| - Customers who were tricked receive nothing.
|
| - The FTC has more play money to continue bureaucratic empire
| building and create more do-nothing jobs.
| pylua wrote:
| As a lay person, and not a lawyer, I'm not sure how this is not
| considered large scale fraudulent misrepresentation.
|
| It seems like the fines are extremely light, and there is no
| real accountability. In the very least, they should be required
| to offer refunds to all people who bought those products.
| deadbabe wrote:
| What exactly have customers lost by buying something that
| wasn't actually made in America?
| calderknight wrote:
| A USA made product
| sosodev wrote:
| What do companies gain by pretending that their product is
| made in America?
| glimshe wrote:
| Many people in the US will pay more for a product made in
| the US. I'm one of these people.
| coolhand2120 wrote:
| Faith in the system
| CivBase wrote:
| The funds and impetus to buy something that was made in
| America.
|
| I don't know how you'd quantify that as a function of the
| product's price, but they figured out a way to put a price
| tag on emotional damage so I'm sure someone can figute it
| out.
| fragmede wrote:
| jobs
| _heimdall wrote:
| Some customers do actually make purchasing decisions to
| support products made in their home country. Buying a product
| falsely labeled as Made in the USA tricks the customer into
| supporting a product or business that they would otherwise
| have wanted to avoid supporting.
|
| Said differently, the customer lost the freedom to support a
| product actually made in the US while simultaneously
| supporting something they didn't mean to.
| TaylorAlexander wrote:
| Well it's certainly an abstract loss, so saying "what
| exactly" is slightly unfair as the abstract loss cannot be
| exactly quantified. But probably the simplest answer is that
| the customers may have paid less if they knew it was not made
| in the USA, and so they have lost money. So perhaps a class
| action lawsuit will be filed. I guess loss of money is
| concrete enough.
|
| More abstractly the people may have hoped to support the work
| of their fellow countrymen, and would instead have been
| undercutting them with overseas labor. That loss is not
| financial, but in the way the US works perhaps some monetary
| value could be conjured for this as well. Or perhaps that
| loss is considered equal to the amount they overpaid for the
| product.
|
| In any case I think I've convinced myself that the customers
| should receive some financial compensation and the company
| should be required to clearly notify people of what they have
| done, to scrub any goodwill they earned that could have led
| to an increase in future purchases at the store.
| thaumasiotes wrote:
| https://satwcomic.com/my-little-pony
| TaylorAlexander wrote:
| I've read the comic but I'm very curious to learn more
| about how you feel it relates here. I guess the biggest
| thing I'm taking away from your comic is that maybe the
| people from Denmark don't care much about some religious
| diet restrictions, and I'm not seeing how that relates to
| this story.
| rabuse wrote:
| It's called fraud. That word used to mean something.
| zitterbewegung wrote:
| We prosecute companies for false advertisement so why would
| this be any different? People sometimes buy products for a
| indicator that says made in the USA
| nytesky wrote:
| The article lists a teen marketed mattress as one of the
| "made in USA" products actually made in china.
|
| After the last decade of lead contamination and other toxic
| products from China, I would imagine some parents are wary of
| a product they spend close proximity to for 10 hours every
| night for years.
|
| https://www.thestreet.com/opinion/china-has-a-history-of-
| sel...
| bpfrh wrote:
| I would argue that if they bought a more expensive product
| because of the label "made in usa" then they lost the
| difference between what they would have paid for the cheaper
| product and what they paid for the product labelled "made in
| usa".
| CivBase wrote:
| Do FTC fines go to the FTC budget?
| whoknowsidont wrote:
| I love how instead of being mad at example #4012 about American
| companies profiting from fraudulent activity, you spend effort
| blaming the organization punishing them.
|
| This is a _civil_ penalty and its the largest one to date for
| violating a previous order and agreement about Williams-Sonoma
| stopping fraudulent use of "Made in USA." More severe penalties
| would have ultimately required the matter to be handled
| directly by other government entities.
|
| In fact the DOJ themselves could have handed out harsher
| penalties or pursued company executives for perjury.
|
| The FTC did what they were able to do and instead of saying
| "it'd be better if the FTC had more authority and discretion in
| what punishes to give." you just throw snark at them and not at
| the political party that continually has made every government
| institution's teeth dull :^).
| nathanaldensr wrote:
| They're _both_ to blame, which I 'm sure GP would've
| clarified if you had asked them. Stop seeing in false
| dichotomies.
| rootusrootus wrote:
| Only about half of everyone believes both sides are bad.
| This puts the average somewhere in the correct direction,
| at least.
| bequanna wrote:
| If the FTC is this impotent and toothless, why do they even
| exist?
| akira2501 wrote:
| Pure FUD.
|
| https://www.ftc.gov/enforcement/recent-ftc-cases-resulting-r...
| bequanna wrote:
| 28 cases resulted in payments in 2022.
|
| This is a joke. You may as well round that down to zero.
| suyash wrote:
| So company supposedly cheated customers by mislabelling and
| government is collecting a huge fine, will the people who got
| cheated see their money back or it just goes to Uncle Sam's
| pocket?
| rcstank wrote:
| We need to legislate that any fines like this go back to
| customers instead of government /s
| VS1999 wrote:
| What do you mean supposedly? They absolutely cheated customers.
| geor9e wrote:
| Company With $8.7B in Yearly Sales Pays $3.18M Marketing Fee
| Covering Several Products for The Last Four Years, Will Report As
| "Misc Expenses" In Quarterly Report
| jayyhu wrote:
| I think in a more fair world, they should be forced to recall
| all falsely labeled "Made In USA" products and offer to replace
| them with real products made in the USA.
| imagetic wrote:
| It sounds like they made a good investment on that order of MADE
| IN USA labels.
| tombert wrote:
| Since this is the second time this has happened, I kind of feel
| like subsequent offenses need to grow exponentially, like 3x for
| each new fine. That would make the next fine $9M, than $27M, then
| $91M etc.
|
| I think that would avoid the fine just becoming an extra tax.
| blackeyeblitzar wrote:
| I think even the first offense should be all associated
| revenues plus a punitive fine on top of that. This current fine
| is nothing.
| gmd63 wrote:
| Any lawyers here able to explain why the fine is negligible?
| Feels like a complete joke, encouraging dishonesty as the winning
| strategy in business. Are judges scared they'll be assassinated
| or something? Do we need to anonymize them?
| vl wrote:
| To know if fine is disproportionately small you need to know
| the volume of sales of the mislabeled goods. If they sold only
| $500k of goods, then fine is unreasonably large, for example.
| 1123581321 wrote:
| I don't know the sales volume, but this fine is for, if I
| read correctly, seven products. WS has roughly 15,000
| products across its brands. So the fine may be in the
| ballpark of one year's sales, which would be about 5.5x their
| profit on those sales. But that assumes these products'
| revenue and margins are proportionate to the rest of them.
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