Mattress giant ordered to pay $15m over ‘misleading’ online ads

Germany’s Emma Sleep Pty Ltd, which started in 2013 and operates as an online ‘bed-in-a-box’ store in Australia, was found to have made false or misleading statements about the retail price of mattresses, bed frames, pillows and sleep accessories.

But the corporate watchdog said 58 of these products were not on sale at the strike-through price or without any discount.

The remaining 16 products were ‘almost never’ for sale at the strike-through price, without discount or savings.

The misleading sales were advertised between June 2020 and March 2023

Emma Sleep’s website was visited more than 4.9 million times during this period and more than 243,000 products were sold, generating revenues of more than $134 million, according to the ACCC.

“Emma Sleep Pty Ltd also admitted misleadingly stating that the discounted prices were available for a limited time, by using a countdown timer that would reset during a sale campaign, and by using phrases such as ‘Ends soon’ when the products were still advertised at the same or a similar discount,” the ACCC said.

“The court found that the conduct arose from a deliberate marketing strategy and that senior management turned a blind eye to whether this breached the Australian Consumer Law.

“The behavior was not unintentional or caused by a system error.”

The court found that Emma Sleep Southeast Asia was guilty of the same misleading conduct.

Emma Sleep Pty Ltd was ordered to pay a fine 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 statements, giving 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 would end soon, which may have put pressure on them to make a hasty purchasing decision.”

Emma Sleep was also ordered to issue corrective notices and implement a compliance program.

NEVER MISS A STORY: Be the first to receive your latest news and exclusive stories by following us on all platforms.