The Australian Competition and Consumer Commission (ACCC) has found that Emma Sleep Pty Ltd, an online “bed-in-a-box” retailer operating in Australia since 2013 under German ownership, engaged in deceptive pricing practices. The company falsely advertised sale prices for a range of products, including mattresses, bed frames, pillows, and sleep accessories.
The ACCC revealed that 58 of these products were not previously available at the advertised strikethrough price or without any discount. Additionally, 16 other products were almost never sold at the strikethrough price without a discount or savings.
These misleading promotions were conducted from June 2020 until March 2023. During this period, Emma Sleep’s website received over 4.9 million visits, facilitating the sale of more than 243,000 products and generating over $134 million in revenue.
The watchdog also noted that Emma Sleep admitted to misleading consumers by suggesting that discounted prices were only available for a limited time. This was done by using a countdown timer that reset during sales campaigns and phrases like “Ending Soon,” even though the products continued to be offered at similar discount rates.
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 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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