Samsung sued over ‘misleading’ phone ads

The Australian Competition and Consumer Commission (ACCC) has launched Federal Court action against Samsung, claiming that a series of advertisements by the phone-maker were deceptive.

The ACCC argues that a series of 300 Samsung ads from February 2016 onwards misled consumers about the water resistance of the company’s Galaxy phones.

An ACCC court filing states that Samsung Australia “widely promoted and marketed the Galaxy phones (and continues to do so) on the internet and in other media, including in social media (Facebook, Twitter and lnstagram), television, billboards, radio, brochures, YouTube, email marketing, press releases, articles sponsored by Samsung Australia, at point of sale in its stores and in other retailers' stores.”

The document adds: “In its marketing, Samsung Australia frequently depicts the Galaxy phones being used in or exposed to various types of water, including in the ocean and in swimming pools. Samsung Australia also makes statements in advertisements to the effect that the Galaxy phones are water resistant to a depth of 1.5 metres for up to 30 minutes.”

However, the ACCC argues, Samsung Australia's marketing materials were misleading because they “expressly and / or impliedly represented, and continues to represent” that Galaxy phones “would be suitable for use in, or exposure to, all types of water, including, for example, oceans and swimming pools” and that “the useful life of the Galaxy phones would not be adversely affected if the phones were used in, or exposed to, all types of water, including, for example, oceans and swimming pools”.

Samsung had no basis for making the “the suitable for use representations and the useful life representations” in the ads, the ACCC document states. The company did not conduct or commission “sufficient testing” of the impact of submerging Galaxy phones on their useful life or the impact of liquid other than fresh water on the devices. For example, the ACCC cites a statement on the Samsung website that the Galaxy S10 is “not advised for beach or pool use”.

The phone-maker has also denied warranty claims relating to Galaxy devices damaged through exposure to liquid, the ACCC states.

“Samsung intends to defend the court proceedings brought by the ACCC,” a statement issued by the company said.

“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.”

“Samsung itself has acknowledged that water resistance is an important factor influencing Australian consumer decisions when they choose what mobile phone to purchase,” ACCC chair Rod Sims said.

“Samsung’s advertisements, we believe, denied consumers an informed choice and gave Samsung an unfair competitive advantage,” the ACCC head argued.

“Samsung showed the Galaxy phones used in situations they shouldn’t be to attract customers,” Sims said.

“Under the Australian Consumer Law, businesses cannot mislead consumers about their products’ capabilities. Any attempt to do so will risk court action from the ACCC.”

The ACCC said it is seeking “penalties, consumer redress orders, injunctions, declarations, publication orders, an order as to findings of fact, and costs.”

Copyright © 2019 IDG Communications, Inc.

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