Mattress company Emma Sleep has been ordered to pay a $15 million fine by a federal court after the company admitted to misleading sale advertisements.
German-owned Emma Sleep Pty Ltd, which began in 2013 and operates as an online “bed-in-a-box” retailer in Australia, was found to have made false or misleading representations about the sale price of mattresses, bed frames, pillows and sleep accessories.
German-owned Emma Sleep Pty Ltd found to have made false or misleading representations about the sale price of products. (Instagram/@ph.emmasleep)
But the corporate watchdog said 58 of these products had not been for sale at the strikethrough price or without any discount.
The remaining 16 products had “almost never” been for sale at the strikethrough price without a discount or savings.
The misleading sales were advertised between June 2020 and March 2023.
Emma Sleep’s website was accessed more than 4.9 million times during this period and over 243,000 products were sold, resulting in over $134 million in revenue, the ACCC said.
“Emma Sleep Pty Ltd also admitted that it had made misleading representations that the discount prices were available for a limited time, by using a countdown timer that would reset during a sale campaign, and using phrases such as ‘Ending Soon’ when the products continued to be advertised at the same or similar discount,” the ACCC said.
“The court found that the conduct arose out of a deliberate marketing strategy and that senior management turned a blind eye to whether it contravened the Australian Consumer Law.
“The conduct was not inadvertent or caused by a system error.”
The misleading sales were advertised between June 2020 and March 2023. (ACCC)
The court found Emma Sleep Southeast Asia engaged in the same misleading conduct.
Emma Sleep Pty Ltd was ordered pay a penalty of $7.5 million, and Emma Sleep Southeast Asia Inc to pay $7.5 million.
“The Emma Sleep companies breached the Australian Consumer Law by making false or misleading representations which gave consumers the impression they were getting a bargain,” ACCC Commissioner Luke Woodward said.
“The ACCC was concerned that Emma Sleep’s conduct created a false sense of urgency about the offer by using a countdown timer that reset itself, and by making false claims suggesting to consumers that the sale was ending soon, which to may have pressured them into making a rushed purchase decision.”
Emma Sleep was also ordered to publish corrective notices and implement a compliance program.
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