Samsung fined $9.8 mn for misleading Australian phone ads

NEW DELHI: Samsung admitted to making false and misleading claims in nine advertisements between 2016 and 2018 about the water resistance of seven models of Galaxy smartphones.

An Australian judge on Thursday ordered Samsung to pay 14 million Australian dollars (USD 9.8 million) in penalties for misleading advertising over how water-resistant some models of smartphones are. Federal Court Justice Brendan Murphy gave Samsung Electronics Australia, a subsidiary of South Korea-based Samsung Electronics Co., 30 days to pay the fines.

Samsung must also pay AUD 200,000 ($140,000) toward the costs of the Australian Competition and Consumer Commission, the consumer watchdog that initiated an investigation of the phones four years ago. Samsung admitted to making false and misleading claims in nine advertisements between 2016 and 2018 about the water resistance of seven models of Galaxy smartphones. They are the S7, S7 Edge, A5 (2017), A7 (2017), S8, S8 Plus and Note 8. Samsung and the commission also agreed to the penalties imposed.

The misleading ads promoted the phones’ water resistance and suitability for use in swimming pools and seawater. But the charging ports could be damaged and stop working if the phones were recharged while the ports were still wet. Samsung said the charging port issue only effected the seven models identified in the case that were launched between 2016 and 2017. “The issue does not arise for Samsung’s current phones,” a Samsung statement said.

Samsung sold 3.1 million of the vulnerable phones in Australia, but the court could not determine how many customers found faults in their charging ports.

An unknown number of customers had their ports replaced by authorised Samsung repairers. Some repairers did the job for free while others charged between AUD 180 (USD 126) and AUD 245 (USD 171), the court heard.

Murphy said customers were entitled to assume that a large company such as Samsung would not advertise that its Galaxy phones could safely be submerged in water if they could not. “A great many consumers are likely to have seen the offending advertisements and a significant number of those who did so are likely to have purchased one of the Galaxy phones,” Murphy said in his judgment.