Date
22 October 2019
Samsung has been accused by Australia’s consumer watchdog of misleading people into assuming that Galaxy phones would be suitable for use in, or for exposure to, all types of water. Photo: Reuters
Samsung has been accused by Australia’s consumer watchdog of misleading people into assuming that Galaxy phones would be suitable for use in, or for exposure to, all types of water. Photo: Reuters

Australia watchdog sues Samsung over ‘misleading’ phone ads

Australia’s consumer watchdog has sued Samsung’s Australian unit for allegedly misleading consumers by promoting water-resistant Galaxy smartphones as suitable to use in swimming pools and the surf, Reuters reports.

Samsung did not know or sufficiently test the effects of pool or saltwater exposure on its phones when ads showed them fully submerged, the Australian Competition and Consumer Commission (ACCC) was quoted as saying in its lawsuit.

The case, which could result in multi-million dollar fines, centers on more than 300 advertisements in which Samsung showed its Galaxy phones being used at the bottom of swimming pools and in the ocean, according to the report.

“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 … when this was not the case,” ACCC Chairman Rod Sims said in a statement on Thursday.

Samsung said it stands by its advertising and that it will defend against the case.

Samsung’s water resistance claims came under heavy scrutiny as early as 2016 when influential US magazine Consumer Reports said the Galaxy S7 phone – which appears dunked in a fish tank in commercials – had failed an immersion test.

The company attributed that to a manufacturing defect, affecting a small number of phones, which it soon fixed. But customers online continued reporting problems, forum comments show.

Some consumers damaged their phones when exposing them to water and Samsung had refused to honor warranty claims, the ACCC said in the lawsuit.

The regulator also said Samsung’s advice to some Galaxy model users that the phones were not suitable for beach or pool use suggested the firm considered water could cause damage.

“Samsung showed the Galaxy phones used in situations they shouldn’t be to attract customers,” Sims said.

“Samsung’s advertisements, we believe, denied consumers an informed choice and gave Samsung an unfair competitive advantage.”

The ACCC alleges law breaches occurred in more than 300 advertisements. If proven, each breach after 1 Sept. 2018 can attract a fine of up to A$10 million (US$7 million), triple the benefit of the conduct or as much as 10 percent of annual turnover.

Breaches prior to 1 Sept. 2018 can attract penalties as high as A$1.1 million, according to the report.

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