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this post was submitted on 28 Apr 2024
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Lol. This is the real world, and it's already proven that the current system is inadequate, it is not enough to stop companies from doing it.
The fact that companies keep continuing to do it is the proof. The fines are NOT enough to disincentivize the practice. The current fines are still less than the benefit the company receives from the act, otherwise they wouldn't be doing it.
Bullshit like false advertising should have a dramatic punishment, not a slap on the wrist. I don't give a shit if it bankrupts a business. A business lying to their customers should destroy it. If they want to take a chance at destroying the entire business over something as small as a fake label, they can decide to roll those dice, but don't be surprised when they lose it all.
As a whole you're correct, it often is inadequate, but in this very specific case of 7 products including some teen bed-padding, then the fines seem pretty proportional.
It depends on how much they made from these products. If the profit from the sale of those products is more than the $3.2M in fines, it is still just a cost that can be planned for when determining sale price and margins. The penalty needs to be higher than the profit from the deceptive practice or else it's just a cost that can be planned for, not a real deterrent.
According to their 10-K end of year SEC Filing they made $1.7 Bn cash inflow profits, which resulted in a $1.3 Bn cash balance.
So, hypothetically, if they had made 3.175 Million net profit on selling one of their hundreds of types of bedding products, one of thousands of types of products total, then it would be 1/500th of their total profits across their many brand names and stores, or another possible scenario would be if everything else they sold at a cost and they actually did make this much profit from this specific bedding.
They actually saw a 9.9% decline in net revenue that year, attributed to store closures.