Samsung Fined Sh1.1 billion for Misleading Water-Resistance Ads

Samsung has agreed to pay a $9.65 (Sh1.1 billion) million fine for misleading users about a feature on some of its Galaxy smartphones. The Australian competition & Consumer Commission (ACCC) said on Thursday that Samsung Australia had run nine advertisements highlighting that seven of its smartphones had a water resistant feature.

The local unit of Samsung in Australia admitted that it had misled buyers of the Galaxy phones about the water-resistance levels. ACCC initially sued the company in July 2019, and Samsung clarified that the issue did not affect its latest models.

According to ACCC, Samsung ran the advertisements between March 2016 and October 2018 claiming that the phones could be immersed in pools or sea water. The ads on TV, online, and on billboards demonstrated the phones’ water resistance being used at pools and beaches, despite the fact that the phones are not suitable for use in pool water or salt water.

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Samsung sold 3 million of the Galaxy phone models covered by the contract in Australia.

Users however started complaining shortly after purchasing the devices as their phones stopped functioning properly and in some cases stopped entired after exposure to the water.

“Samsung Australia has acknowledged that if the Galaxy phones were submerged in pool or sea water there was a material prospect the charging port would become corroded and stop working if the phone was charged while still wet,” the ACCC said in a statement on Thursday.

The regulator said the feature was strong selling point for the smartphones.

“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,” said ACCC Chair Gina Cass-Gottlieb.

Samsung and the ACCC both agreed that changes made to the latest models of smartphones launched in Australia beginning in March 2018 did not pose such risks from water exposure.

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