Samsung agrees to pay $14m penalty over deceptive Galaxy advertisements

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Samsung has agreed to pay a $14m penalty for deceptive claims that seven of its Galaxy telephones had been waterproof when the units may cease working after being utilized in swimming swimming pools or ocean water.

Justice Michael Murphy accepted the settlement between the tech firm and the Australian competitors and shopper fee (ACCC) within the longrunning case launched in 2019, over advertisements associated to seven Galaxy cellphone fashions.

The competitors watchdog had alleged Samsung misled and deceived prospects with its claims about telephones throughout greater than 300 ads since February 2016. In courtroom on Thursday, the barrister for Samsung, Nicholas De Young, mentioned the total calculation of ads affected got here to 684.

The advertisements on-line, TV, and on billboards confirmed the telephones being waterproof and getting used at swimming pools and seashores, regardless of the telephones not being appropriate to be used in pool water or salt water.

The agreed settlement is for a a lot smaller set of advertisements. Samsung has agreed as a part of the settlement of the case that 9 advertisements for seven units that had been promoted over two and a half years between 2016 and 2018 had been deceptive.

The firm has admitted that if the units had been utilized in salt water or swimming pools, there was “a material prospect of damage by corrosion to the charging port of the phone”, the barrister for the ACCC, Caryn Van Procter, advised the courtroom.

During that point, Samsung bought 3m of the Galaxy cellphone fashions included within the settlement in Australia.

The drawback would come up when folks went to cost their cellphone whereas it nonetheless had water within the charging port, regardless of a warning popping up on the cellphone advising the person towards charging it. Samsung has since mounted this challenge with {hardware} and software program adjustments in later fashions of the Galaxy cellphone, the courtroom heard.

While there was some data supplied to the courtroom on the variety of views the Facebook and Twitter advertisements acquired – within the lots of of 1000’s of views every – the courtroom heard there was no solution to know what number of customers purchased the units off the again of the advertisements, nor what number of had subsequently had a fault with the cellphone on account of utilizing it in pool or ocean water after which charging it.

Murphy mentioned, in agreeing to the $14m settlement, that many customers would have used their telephones in the way in which represented within the advertisements, counting on these representations.

He mentioned $14m would act as a deterrent and was a “real and sufficient sting” at 14% of Samsung Australia’s revenue over the past six years. He additionally criticised the cellphone maker for less than cooperating to resolve the matter lately after years of opposition to the ACCC’s case.

He criticised how merchandise are sometimes marketed in Australia, saying too usually the federal courtroom sees circumstances introduced earlier than it the place merchandise are oversold to customers in advertising campaigns.

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Samsung was ordered to pay $14m plus a $200,000 contribution to the ACCC’s prices inside 30 days of the order.

The chair of the ACCC, Gina Cass-Gottlieb, welcomed the ruling.

“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,” Cass-Gottlieb mentioned.

“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.”

A spokesperson for Samsung mentioned the corporate had extensively examined the merchandise with each sea and pool water, however welcomed bringing the case to an in depth.

“Samsung endeavours to deliver the best possible experience to all its customers. Samsung regrets if any Galaxy users have experienced an issue with their device as a result of the matters covered by this case.”

The Samsung units included within the settlement are the Galaxy S7, S7 Edge, A5, A7, S8, S8 Plus and Note8 telephones.


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