Australian consumer watchdog drags Samsung to court for alleged misleading ads

Samsung has been called out by the Australian Competition and Consumer Commission (ACCC) for misleading advertisements about its Galaxy smartphone models’ water resistance feature.

According to a court filing seen by Marketing, the ACCC alleged that the smartphone manufacturer made “false, misleading and deceptive” representations in advertising the water resistance of various Galaxy-branded mobile phones. The ACCC legal document claimed that Samsung’s Galaxy phones which were advertised as being water resistant were sold at a higher price than Samsung phones which do not have this feature. Approximately four million Galaxy-branded phones have been sold in Australia.

The ACCC’s case involves over 300 advertisements by Samsung. The ads which have been running on social media, online, TV, billboards, brochures and other media platforms since February 2016 and said that the Galaxy phones are water resistant and depicted them being used in, or exposed to, oceans and swimming pools. The Galaxy smartphones were also promoted as being water resistant for up to 1.5 metres deep for 30 minutes.

However, the ACCC claims Samsung Australia did not undertake or have knowledge of testing, or sufficient testing, of the effect of immersion in liquid (including liquids other than fresh water) on the useful life of the Galaxy phones. The Australian competition watchdog argues that Samsung did not have a reasonable basis, and that the Galaxy phones were not suitable for use in all types of water. “The life of the phones could or would likely be adversely affected if used in water (including non-fresh water),” ACCC said in the legal documents.

Meanwhile, Samsung said it intends to defend the court proceedings brought by the ACCC.

“Samsung stands by its marketing and advertising of the water resistancy of its smartphones. We are also confident that we provide customers with free-of-charge remedies in a manner consistent with Samsung’s obligations under its manufacturer warranty and the Australian Consumer Law. Customer satisfaction is a top priority for Samsung and we are committed to acting in the best interest of our customers,” it added.

According to ACCC chair Rod Sims, “Samsung’s advertisements, we believe, denied consumers an informed choice and gave Samsung an unfair competitive advantage. Samsung showed the Galaxy phones used in situations they shouldn’t be to attract customers.”

Under the Australian Consumer Law, businesses cannot mislead consumers about its products’ capabilities and any attempt to do so will risk court action from the ACCC. Currently the ACCC is seeking penalties, consumer redress orders, injunctions, declarations, publication orders, an order as to findings of fact, and costs.

(Photo courtesy: Samsung website)