Samsung pays $14m penalty over water resistance claims

The Australian Competition and Consumer Commission (ACCC) has won a $14 million court order against Samsung Electronics Australia after the vendor admitted to misleading consumers about the water resistance of various Samsung Galaxy devices.

The Federal Court found that Samsung made false or misleading claims about the water resistance of the S7, S7 Edge, A5 (2017), A7 (2017), S8, S8 Plus and Note 8 Samsung Galaxy phones.

Samsung Australia conducted a marketing campaign between March 2016 and October 2018 across Facebook, Twitter, Instagram, on its website and in-store that contained the misleading clams.

The company has acknowledged that there was a material prospect the charging port would become corroded and stop working if the phone was charged while still wet after being submerged in pool or sea water.

ACCC Chair Gina Cass-Gottlieb said the regulator had received hundreds of complaints from consumers who had experienced issues — including the handsets stopping working in many cases — following their Galaxy phones being submerged.

“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,” she 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.”

The marketing campaign ended shortly before maximum penalties under consumer law were increased. Recommended penalties for breaches of the law were increase from $1.1 million to the greater of $10 million, three times the value of the benefit received or, where the benefit cannot be calculated, 10% of annual turnover in the preceding 12 months.

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