Home / Marketing/ Australia regulator sues Samsung, says water resistance ads misleading

Australia regulator sues Samsung, says water resistance ads misleading


Comments / {{hitsCtrl.values.hits}} Views / Friday, 5 July 2019 00:10


A model demonstrates the waterproof function of Samsung Electronics’ new smartphone, Galaxy S7 Edge, during its launch ceremony in Seoul, South Korea, 10 March 2016 – Reuters

SYDNEY (Reuters): Australia’s competition regulator said on Thursday it is suing the local unit of South Korea’s Samsung Electronics Co Ltd, alleging it misled consumers by promoting its Galaxy smartphones as water resistant.

The suit, which if successful could result in multi-million dollar fines, centres on more than 300 advertisements in which Samsung showed its Galaxy phones being used underwater in swimming pools and the sea.

The Australian Competition and Consumer Commission (ACCC) said the world’s largest producer of smartphones had not conducted sufficient testing to know the actual effects of fresh water or saltwater exposure on its phones.

“The ACCC alleges Samsung’s advertisements falsely and misleadingly represented Galaxy phones would be suitable for use in, or for exposure to, all types of water ... when this was not the case,” ACCC Chairman Rod Sims said in a statement.

Samsung on its website said it stands by its advertising, complies with Australian law and will defend the case.

The suit is another blow for the electronics giant which suffered reputational damage in 2016 when its Galaxy Note 7 smartphones suffered a costly recall after being found fire-prone.

The firm, also the world’s biggest maker of memory chips, is due to announce preliminary quarterly earnings on Friday. It is widely expected to post a profit plunge due to chip price falls.

The ACCC said consumers damaged their phones when exposing them to water and that Samsung had refused to honour warranty claims, which the company denied.

The ACCC also said Samsung’s advice to some Galaxy model users that the phones were not suitable for beach or pool use suggested the firm considered water could cause damage.

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

The ACCC alleges law breaches occurred in more than 300 advertisements. If proven, each breach after 1 Sept. 2018 can attract a fine of up to A$10 million ($7 million), triple the benefit of the conduct or as much as 10% of annual turnover.

Breaches prior to 1 September 2018 can attract penalties as high as A$1.1 million.


Share This Article

Facebook Twitter


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Ministry of Tourism: A nation rich in hospitality

Monday, 21 October 2019

This series is based on business leader Dhammika Perera’s recently revealed ‘Economic Growth Strategy and Action Plan to increase GDP Per Capita from $ 4,000 to $ 12,000’. The document outlines goals and action plans for 23 ministries and today


Fixing lending rates and waiving farmer loans: two policies that do not augur well for borrowers

Monday, 21 October 2019

Recently, there were two policy pronouncements relating to lending, one already implemented by the Central Bank and the other being proposed for implementation by the SLPP presidential hopeful, Gotabaya Rajapaksa, that if he is elected to presidency.


Creating a cyber-resilient society

Monday, 21 October 2019

While technology is opening a whole new world of opportunities, the threats posed from terrorists are no longer pure physical attacks but also expand to the digital world. The danger may not venture into weapons or create a battlefield with thousands


Find out where he is going – In pursuit of the consumer journey

Monday, 21 October 2019

I remember very clearly the excitement of buying our very first TV set. My dad and mum excitedly chatted about it. They spoke to all their friends who had TV sets at their homes. My dad virtually had an analysis of brands and what his friends said we


Columnists More