United States: Will Nectar Sleep Wake From A Recurring Dream?

Bedding manufacturer doesn't respond to NAD over limited time offer, gets FTC attention

SFW, but Still

There is an ad circulating online from Nectar Sleep, a mattress maker that markets its "bed of your dreams" with snappy, fast-talking, absurdist ads. The online video includes CGI caricatures of Donald Trump and Kim Jong-un with their disembodied brains hitting each other on a dance floor. The two-and-a-half-minute marketing piece is titled "Make America Sleep Again," and has been watched on YouTube over 13 million times.

As absurd as this marketing piece between CGI caricatures of Donald Trump and Kim Jong-un is, the legal issue more specifically relates to Nectar Sleep's recurring offer on their website. On their website and with their online product mentions, Nectar Sleep includes a recurring offer: "LIMITED OFFER: $125 Off + 2 Free Pillows."

Tuft & Needle, one of Nectar Sleep's competitors in the bedding industry (see here, here and here), took the tag line before the National Advertising Division (NAD), alleging that the tag "misrepresents the price at which the Nectar mattress is sold because (1) it is not, in fact, offered for a limited time because this price point is always available to the purchaser, and (2) the pillows are never offered for sale by Nectar, therefore they are misleadingly offered as 'free.'"

NAD claims that it never received a "substantive response" from Nectar Sleep addressing Tuft & Needle's claims and asserting any of Nectar Sleep's defenses. Based on Nectar Sleep's lack of response, NAD will likely kick the matter upstairs to the Federal Trade Commission (FTC) for review.

The Takeaway

What calculus does a company engage in when it decides to risk FTC review? Is it because an offer or an ad is so successful, it's more cost-effective to let the ad round up business until a complaint is filed? Or is it something else?

This is not the first time that Nectar Sleep has been confronted with the FTC's enforcement powers. Nectar Sleep settled a made-in-the-USA complaint before the FTC about a year ago. Therefore, Nectar Sleep is reasonably aware of the FTC's broad enforcement for misleading marketing claims that may reasonably deceive consumers and the penalties that follow. It will be interesting to see how the FTC responds to this case, as Nectar Sleep has elected to not respond to the NAD complaint and Nectar Sleep has already been ostensibly warned that the FTC will take sweeping action against misleading businesses practices when needed.

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