Samsung Electronics Australia and the Australian Competition and Consumer Commission (ACCC) have agreed to resolve proceedings commenced by the ACCC in June 2019, which has been accepted by the Federal Court.
The case relates to nine advertisements published in Australia on websites, social media and in a promotional booklet about seven historical models of Galaxy smartphones launched in 2016 and 2017.
Samsung Electronics Australia has been ordered by the Federal Court to pay $14 million in penalties after admitting to misleading consumers about the suitability of the smartphones to be submerged in pool or sea water.
Samsung Australia’s water resistance claims promoted an important selling point for these Galaxy phones, ACCC chair Gina Cass-Gottlieb said. “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.” The ACCC reviewed hundreds of complaints from consumers who experienced issues with their Galaxy phones following exposure to water and, in many cases, that their Galaxy phone stopped working, she said.
In a media statement, Samsung Electronics 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.
The main question in the case related to a particular use of the historical Galaxy smartphone models, specifically, if a user submerged the historical phone in sea or pool water and then attempted to charge the phone while that water remained in the charging port.
According to Samsung, the seven smartphone models were tested extensively to assess their water resistance capabilities, prior to launch, including tests in pool and sea water. The phones would display a warning message to discourage consumers from attempting to charge the phones while water was in the charging port. The phones also had in-built systems to minimise the prospect of corrosion if the phones were attempted to be charged while water remained in the charging port.
Notwithstanding this, the ACCC and Samsung have agreed that, if the historical Galaxy phone models were submerged in pool or sea water and then attempted to be charged while pool or sea water remained in the charging port, despite the warning message, then there was a material prospect that the charging port might corrode over time. The case only relates to a prospect of corrosion of the charging port. It does not relate to water resistance generally.
The ACCC and Samsung also agreed that changes made to subsequent models of Galaxy phones launched in Australia from March 2018 onwards means that there was and is no longer a material prospect of corrosion if Galaxy phones were attempted to be charged while pool or sea water remained in the charging port.
The ACCC and Samsung have also agreed that the nine advertisements published in Australia between 2016 and 2018 in relation to the historical models were misleading because they represented that these phones could be submerged in pool or sea water, despite the prospect of corrosion arising in the limited scenario where a consumer then charged their phone while salt or pool water remained in the charging port, despite the warning message.