Emma Sleep, a German-owned mattress retailer operating in Australia since 2013, has been fined $15 million by a federal court for misleading advertising practices. The company, known for its online “bed-in-a-box” sales, was found guilty of making false claims regarding the sale prices of its mattresses, bed frames, pillows, and sleep accessories.
An investigation revealed that out of 74 advertised products, 58 had never been sold at the prices indicated with strikethroughs, while the remaining 16 were rarely offered at those prices without discounts. The misleading promotions occurred from June 2020 to March 2023, during which time Emma Sleep’s website garnered over 4.9 million visits and achieved more than $134 million in sales from approximately 243,000 products.
The Australian Competition and Consumer Commission (ACCC) reported that Emma Sleep also misled consumers by suggesting discounts were time-sensitive through the use of countdown timers that reset during promotional campaigns and by regularly using phrases such as “Ending Soon,” despite the discounts persisting.
The court determined that these misleading practices were part of a deliberate marketing strategy, highlighting the inaction of senior management, who chose to ignore whether their methods complied with Australian consumer law. This behaviour was characterised as intentional rather than accidental or due to system errors.
Furthermore, Emma Sleep Southeast Asia was also implicated in similar deceptive conduct. Hence, both Emma Sleep Pty Ltd and Emma Sleep Southeast Asia Inc were each ordered to pay $7.5 million in penalties.
ACCC Commissioner Luke Woodward expressed concern over the way Emma Sleep’s marketing tactics fostered a false perception of urgency, potentially coercing consumers into hasty purchase decisions. In addition to the fines, Emma Sleep must disseminate corrective notices and develop a compliance program to ensure adherence to legal standards going forward.
The outcome of this case serves as a significant reminder to retailers about the importance of transparent marketing practices and compliance with consumer protection laws in Australia.