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Samsung Fined AU$14 Million For Misleading Galaxy Phone Waterproof Claims

Tech giant Samsung has been fined for misleading waterproof claims about their Galaxy phones, with the company agreeing to pay $14 million in a settlement with the ACCC.

Samsung has agreed to pay a $14m penalty for misleading claims that seven of its Galaxy phones were water-resistant.

However, the devices could stop working after being used in swimming pools or in ocean water.

The competition watchdog alleged Samsung misled and deceived customers, claiming the phones were water-resistant across over 300 advertisements. 

Advertisements with the claims ran since February 2016. 

In court on Thursday, the barrister for Samsung, Nicholas De Young, said the full calculation of advertisements affected came to 684. 

Online, TV and billboards depicted the phones as being water-resistant and being used at pools and beaches, despite the phones not being suitable for use in pool water or salt water.

The company has admitted that if the devices were used in salt water or 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, told the court.

Issues with the phones would arise when users would charge their phone while it still had water in the charging port, despite a warning popping up on the phone advising the user against charging it. 

Samsung has since fixed this issue with hardware and software changes in later models of the Galaxy phone, the court heard.

Justice Murphy said, agreeing to the $14m settlement, that many consumers would have used their phones in the way represented in the ads, relying on those representations.

He said $14m would act as a deterrent and was a “real and sufficient sting” at 14% of Samsung Australia’s profit over the last six years.

He also criticised Samsung for only cooperating to resolve the matter recently after years of opposition to the ACCC’s case.