Samsung Australia have made provisions for a possible $16M penalty after the Australian Competition & Consumer Commission acted against the Company claiming that they falsely represented the ‘waterproof’ capabilities of their Galaxy range of smartphones, this is despite Samsung warnings that there are limitations to what one of their devices will do under water.
In a Federal Court filing lodged in Victoria claim that Samsung has made false, misleading and deceptive representations in advertising the water resistance of various ‘Galaxy’ branded mobile phones.
The hearing has been running since 2019 before Justice Murphy.
The ACCC claim that Samsung Australia widely promoted the ‘water resistance’ capabilities of their smartphones going back to 2016.
The federal Government body singled out the use of over 300 advertisements across social media, online, TV, billboards, brochures and other media that Samsung used to communicate that their Galaxy phones were water resistant and depicted them being used in, or exposed to, oceans and swimming pools.
They claim that Samsung advertised the Galaxy phones as being water resistant up to 1.5 metres deep for 30 minutes.
“The ACCC alleges Samsung’s advertisements falsely and misleadingly represented Galaxy phones would be suitable for use in, or for exposure to, all types of water, including in ocean water and swimming pools, and would not be affected by such exposure to water for the life of the phone, when this was not the case,” ACCC Chair Rod Sims said.
Since the case was lodged in the Federal Court there has been 22 hearings before Justice Murphy with legal costs on both sides believed to be over $1M.
The ACCC are arguing that Samsung did not have a reasonable basis for making the representations because:
It did not test or know of testing (or sufficient testing) about how exposing a Galaxy phone to water (including non-fresh water) affected the performance of their smartphones.
The ACCC claim that Samsung Australia has denied warranty claims from consumers whose phones were damaged when used in water.
The ACCC also claims that the representations made in multimillion dollar Samsung advertising campaigns for their Galaxy smartphones were false, misleading and deceptive, because the Galaxy phones were not suitable for use in all types of water, and the life of the phones could or would likely be adversely affected if used in water (including non-fresh water).
“Samsung itself has acknowledged that water resistance is an important factor influencing Australian consumer decisions when they choose what mobile phone to purchase,” Rod Sims the head of the ACCC said.
Samsung’s Galaxy phones which were advertised as being water resistant were sold at a higher price than Samsung phones which do not have this feature.
“Samsung’s advertisements, we believe, denied consumers an informed choice and gave Samsung an unfair competitive advantage,” Mr Sims said.
Samsung has sold more than four million Galaxy branded phones in Australia.
“Samsung showed the Galaxy phones used in situations they shouldn’t be to attract customers,” Mr Sims said.
Phones subject to the ACCC’s case are the S10e, S10, S10 Plus, S9, S9 Plus, S8, S8 Plus, S7, S7 Edge, Note 9, Note 8, Note 7, A8, A7, and A5, manufactured between 2016 and 2019.
Samsung’s promotions included advertisements on its website, in social media (Facebook, Twitter and Instagram), television, billboards, radio, brochures, YouTube, email marketing, press releases, sponsored articles, in its stores and in other retailers’ stores.
