The Australian Competition and Consumer Commission (ACCC) has initiated proceedings in the Federal Court against Samsung Electronics Australia Pty Ltd (Samsung) for breaches of the Australian Consumer Law. The consumer watchdog alleges the company made false, misleading and deceptive representations in advertising the water resistance of various ‘Galaxy’ branded mobile phones across more than 300 advertisements since February 2016. The tech giant has widely advertised on a variety of platforms including social media, online, TV, brochures, radio and sponsored articles about the water resistance of their Galaxy smartphones including the fact that the phones are water resistant up to 1.5 metres deep for 30 minutes (example shown right). The ACCC alleges that these Samsung advertisements falsely and misleadingly represented Galaxy phones as being suitable for use in, or for exposure to, all types of water including in ocean water and swimming pools and would not be affected by such exposure to water for the life of the phone, when this is not the case.
The ACCC claims Samsung did not have a reasonable basis for making the representations because:
- It did not test or know of testing (or sufficient testing) about how exposing a Galaxy phone to water (including non-fresh water) affected its usable life;
- It held the view that using Galaxy phones in liquid other than fresh water could damage them. For example, Samsung’s website states that the new Galaxy S10 phone range is ‘not advised for beach or pool use';
- It has denied warranty claims from consumers whose phones were damaged when used in water.
Aside from not having a reasonable basis, the ACCC also claims that the representations are false, misleading and deceptive, because the Galaxy phones were not suitable for use in all types of water, and the life of the phones could or would likely be adversely affected if used in water (including non-fresh water)
Samsung itself has acknowledged that water resistance is an important factor when it comes to consumer decisions as this feature has a considerable influence over what mobile phone people will purchase. As such, Samsung’s advertisements are believed to have denied customers an informed choice which in the process gave the company an unfair competitive advantage. Under the Australian Consumer Law, businesses cannot mislead consumers about their product’ capabilities and as Samsung showed their Galaxy phones used is situations they shouldn’t be to attract customers, they are consequently breaking this law.
Samsung intends to defend the proceeding, standing by its marketing and advertising of the water resistance of its smartphones. The ACCC is seeking penalties, consumer redress orders, injunction, declarations, publication orders, an order as to findings of fact and cost.
If you would like to discuss any issues raised in this article, please do not hesitate to contact our team at Freedman & Gopalan Solicitors, on 02 8999 9837 or fill out the enquiry box and we will get back to you ASAP.