The Australian arm of mattress brand Emma Sleep has admitted it made false or misleading representations about the sale prices of mattresses, bed frames, pillows, and accessories.
The Federal Court found that its related entity Bettzeit Southeast Asia Inc. also engaged in the admitted conduct.
Emma Sleep Pty Ltd admitted that between at least 15 June 2020 and 27 March 2023 it advertised 74 products online, showing a purchase price alongside a higher price with a ‘strikethrough’, and also displaying a percentage discount (such as ‘50% OFF’), or indicating the sale price would represent a certain saving to the consumer (such as ‘Save as much as $3,531’).
Of the 74 products, 58 products had not previously been for sale at the strikethrough price or a price equivalent to the price without the claimed discount.
The remaining 16 products had almost never been for sale at the strikethrough price or a price equivalent to the price without the claimed discount.
“Sales and claimed savings can be enticing to consumers so it is important these claims are accurate,” ACCC (Australian Competition & Consumer Commission) Deputy Chair Catriona Lowe said.
Emma Sleep Pty Ltd also admitted that it had made misleading representations that products would only be available at sale prices for a limited period of time, when in fact that was not the case.
“Sales campaigns on the Emma Sleep website and other platforms indicated that discounts would only be available for limited periods of time through the use of countdown timers. The timers created a false sense of urgency by suggesting the sale price would no longer be available after the timer reached zero. In fact, after reaching zero the countdown timers reset, or the products continued to be advertised for sale at the same or similar discount.”
“These type of false advertising practices not only mislead customers but also mean companies get an unfair advantage over other suppliers,” Ms Lowe said.
The ACCC had also taken action against Emma Sleep Pty Ltd’s German parent, Emma Sleep GmbH. The Court dismissed the ACCC’s allegations that Emma Sleep GmbH engaged in the alleged conduct, or that Emma Sleep Pty Ltd had acted at the direction of, or as an agent for, Emma Sleep GmbH.
The ACCC is seeking declarations, penalties, injunctions, and other orders. The Court will determine the penalty and other orders after a hearing on a date to be fixed.
Back in October 2024 in the UK, the Competition and Markets Authority (CMA) launched court action against Emma Sleep following a previously opened an investigation into the brand over concerns that some of its online sales practices – such as discounts and urgency claims, including countdown timers and high demand prompts – may mislead consumers. (See related).
