Samsung ordered to pay $14m for misleading marketing campaign

27 June 2022 By Simon Levett
Gina Cass-Gottlieb

Samsung Australia has admitted that it has contravened Australian Consumer Law regarding the suitability of certain phones to be submerged in water.

The conduct relates to a marketing campaign promotion of the water immersion feature of the S7, S7 Edge, A5 (2017), A7 (2017), S8, S8 Plus, and Note 8 Samsung Galaxy phones. There were more than 3.1 million of these phones sold in Australia.

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The Federal Court ordered Samsung to pay $14 million in penalties.

Samsung Australia had acknowledged in court that if the Galaxy phones were submerged in pool or seawater, there was a material prospect that the charging port would become corroded and stop working.

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Samsung Australia knew about the charging point corrosion caused by exposure to water and was trying to mitigate this issue. Nevertheless, Samsung was running a marketing campaign that promoted Galaxy phones being used in pools and the sea.

Between March 2016 and October 2018, Samsung Australia conducted a marketing campaign that included nine ads, published across Facebook, Twitter, Instagram, on its website and in-store, which claimed that Galaxy phones were suitable for use in pool and seawater.

“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 a decision to purchase a new phone,” Australian Competition and Consumer Commission (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 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,” said Ms Cass-Gottlieb.

“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.”

Samsung ordered to pay $14m for misleading marketing campaign
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