Samsung Australia has been ordered to pay $14 million in penalties after it admitted to misleading customers about the water resistance of some of its best-selling phones.
The Federal Court ordered the fine against the tech giant on Thursday, after proceedings brought forward by the Australian Competition and Consumer Commission found Samsung misrepresented its Galaxy mobile phones and their suitability to be used in water.
The false or misleading claims were made about the water resistance of the S7, S7 Edge, A5 (2017), A7 (2017), S8, S8 Plus and Note 8 Samsung Galaxy phones.
More than 3.1 million of the Galaxy phones have been sold in Australia, the ACCC said.
Between 2016-2018, Samsung Australia conducted marketing campaigns showing various Galaxy phones submerged in pool or sea water.
Nine adverts republished by the ACCC on Thursday show Samsung Australia spruiking the Galaxy phones and their water resistance on Facebook, Twitter, Instagram, its website and in stores.
“Samsung Australia’s water resistance claims promoted an important selling point for these Galaxy phones. Many consumers who purchased a Galaxy phone may have been exposed to the misleading ads before they made their decision to purchase a new phone,” ACCC chair Gina Cass-Gottlieb said.
“We reviewed hundreds of complaints from consumers who reported they experienced issues with their Galaxy phones after it was exposed to water and, in many cases, they reported their Galaxy phone stopped working entirely,” she said.
Samsung has since acknowledged its products were vulnerable to corrosion in their charging ports, if charged while still wet. Despite that, the company’s marketing campaigns continue to promote the ability to use the phones in pools and sea water.
“Samsung Australia’s ads promoting its Galaxy phones featured people using their phones in pools and sea water, despite the fact that this could ultimately result in significant damage to the phone,” Ms Cass-Gottlieb said.
“This penalty is a strong reminder to businesses that all product claims must be substantiated. The ACCC will continue to take enforcement action against businesses that mislead consumers with claims about the nature or benefits of their products,” she said.
In a statement on Thursday afternoon, Samsung Australia confirmed it had agreed to resolve proceedings regarding the nine misleading advertisements in relation to its seven Galaxy mobile phone.
Samsung Australia said the issue in the case does not arise for Samsung’s current phones or any other models, and it does not relate to any advertising published by Samsung overseas.