Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Hobby Lobby settles New York State’s false advertising investigation, (Jun 12, 2014)
Organizations Mentioned:Hobby Lobby Stores, Inc.
By Greg Hammond, J.D.
Hobby Lobby Stores, Inc. has agreed to pay $220,000 to settle the New York Attorney General’s investigation into allegedly deceptive advertising practices, Attorney General Eric T. Schneiderman’s office announced today. The Attorney General’s investigation determined that Hobby Lobby’s ads misled consumers into believing they were receiving steep discounts over a two-year period, when they were not.
An investigation of Hobby Lobby’s advertising materials began in 2013, in which the Attorney General’s office tracked Hobby Lobby’s 30 percent off and 50 percent off sales. It was discovered that Hobby Lobby advertised home décor, furniture, and framing sales in excess of 52 consecutive weeks. Consequently, the investigation concluded that Hobby Lobby’s “never-ending” sales violated New York’s false advertising laws.
“When companies mislead customers by advertising never-ending sales, our office will hold them accountable,” Schneiderman stated. “Ultimately, a permanent sale is no sale at all.”
According to the terms of the settlement, Hobby Lobby will be required to change its advertising practices over a 60-day period. In addition, the company has agreed to provide $138,600 in supplies to 689 public schools in Upstate New York and will pay an $85,000 civil penalty. The Attorney General broke down the number of schools that are eligible for gift cards for student supplies by county, including: Erie (177); Monroe (108); Onondaga (102); Dutchess (49); Albany (48); Oneida (37); Schenectady (35); Niagara (26); Chemung (23); Orange (20); Rensselaer (20); Saratoga (14); Ulster (14); Madison (5); Wayne (5); Herkimer (3); and Oswego (3).
Companies: Hobby Lobby Stores, Inc.
News: Advertising