On 24 April 2026, the Federal Court ordered bedding supplier Emma Sleep Pty Ltd (Emma Sleep) and Emma Sleep Southeast Asia Inc to pay a total of $15 million ($7.5 million each) in penalties for making false or misleading representations about the sale price of its products. Its conduct was a contravention of s18 of the Australian Consumer Law (ACL) (misleading or deceptive conduct) and s29(1)(i) of the ACL (making false or misleading representations with respect to the price of goods).[1]

The Court found that Emma Sleep routinely advertised products with:

Savings Representations

• a price for the purchase of the Product (Purchase Price), and a higher price that was displayed in strikethrough form (Strikethrough Price);
• a percentage discount – for example, Emma Sleep advertised Products accompanied by the text ‘50% OFF’, ‘GET UP TO 55% OFF’, ‘55% SAVINGS’ and ‘-50%’ (Percentage Discount); and
• a price saving – for example, Emma Sleep advertised Products accompanied by the text ‘Save as much as $3,531’ (Savings Discount).

Limited Time Saving Representations

• a Countdown Timer which purported to indicate the number of days, hours, minutes and seconds remaining before the Sales Campaign was scheduled to end; and/or
• text that the Sales Campaign was ending soon, for example, ‘Last chance to get up to 55% off’ or ‘Ending Soon! Until 3rd of July only’.

In respect of the Savings Representations, Products for sale used a combination of one or more of a Strikethrough Price, Percentage Discount and/or Savings Discount. However, the Court found the Savings Representations² were misleading because:

• the Products in question were not sold at the Strikethrough Price;
• the Strikethrough Price was higher than any of the prices at which these Products were in fact supplied to consumers;
• the Products were not sold at a price equivalent to the price without the Percentage Discount;
• the Products were not sold at a price equivalent to the price without the Savings Discount;
• the Products were not offered for sale at the Strikethrough Price or a price equivalent to the price without the Percentage Discount and/or Savings Discount; and
• the Products were almost never offered for sale at the Strikethrough Price or a price equivalent to the price without the Percentage Discount and/or Savings Discount.

In respect of the Limited Time Sales Representations, the Sales Campaigns were not limited in time, because:³

• prior to the end of a Sales Campaign, the Countdown Timer reached zero and reset to another period of days, hours, minutes and seconds; and/or
• at the end of a Sales Campaign and thereafter, the relevant Products continued to be advertised for sale at the same or similar discount.

This judgement followed Emma Sleep’s admission in 2023 that between at least 15 June 2020 and 27 March 2023 it made a number of Savings Representations and Limited Time Sales Representations during its advertising campaigns across a wide range of channels, including its website, social media, comparison sites, traditional media, direct marketing, and third‑party retailer platforms (Platforms).

The conduct spanned nearly three years, involved extensive online and social media advertising, and generated more than $134 million in revenue.

Importantly, the Court found that this conduct was deliberate, forming part of a marketing strategy in which senior management “turned a blind eye”⁴ to compliance with the Australian Consumer Law. In addition to financial penalties, the Court required corrective notices and implementation of a compliance program.

The Court stated, ‘By its conduct, Emma Sleep misled consumers about the savings that could be obtained in relation to the Products offered for sale. The Savings Representations had the effect of substantially overstating the extent of any discount being offered to consumers. In addition, by making the Limited Time Sale Representations, Emma Sleep created an artificial sense of urgency in relation the availability of sales pricing for the Products.⁵

This case represents one of the largest penalties imposed for misleading pricing and reinforces that the ACCC and courts are prepared to impose significant pecuniary penalties where false discounting is systemic and sustained.

It’s also important to note in addition to the financial penalties, the court imposed the additional significant non‑monetary orders:

• a restraint for a period of 3 years from advertising its products on its Platforms in a misleading manner, including by using inflated ‘strikethrough’ prices paired with percentage discounts or savings claims where the products have not genuinely been sold (or have rarely been sold) at those higher prices, and by promoting sales campaigns using countdown timers or urgency messaging (such as ‘ending soon’) where the promotion is not genuinely time-limited, including where countdown timers reset or the same or similar discounts continue after the stated end of the sale;⁶
• a requirement that Emma Sleep establish, implement, and comply with an ACL compliance program aimed at minimising the risk of future breaches of the ACL, including training for all employees or personnel who deal, or may deal, with consumers in Australia, and a requirement that the entities maintain and continue to implement that compliance program for a period of 3 years (at its own expense);⁷ and
• a requirement to publish a corrective notice on the homepages of the Emma Sleep and Top 5 Best Mattress websites, as well as on Emma Sleep’s Australian Facebook and Instagram pages, which must be published across its Platforms for a minimum period of 90 days.⁸

The focus is not limited to pricing alone but extends to the overall impression conveyed to consumers through the structure, framing and delivery of promotional campaigns.

For further information

Our Consumer and Contracting Law team regularly advises on advertising techniques, promotional campaigns and ACL compliance. We can assist with reviewing marketing material for promotional campaigns, particularly large scale or recurring sales events and preparing disclaimers.

This article was written by Teresa Torcasio, Partner, and Caitlyn White, Special Counsel.

¹Australian Competition and Consumer Commission v Emma Sleep GmbH (Penalty) [2026] FCA 493 (24 April 2026).
²Ibid, Para 23.
³Ibid, Para 31.
⁴Ibid, Para 101.
⁵Ibid, Para 53.
⁶Ibid, Para 4.
⁷Ibid, Para 5.
⁸Ibid, Para 6.