CANBERRA, Australia (AP) — An Australian judge on Thursday ordered Samsung to pay 14 million Australian dollars ($9.8 million) in fines for misleading advertising about the water resistance of certain smartphone models.
Federal Court Judge Brendan Murphy gave Samsung Electronics Australia, a subsidiary of South Korea-based Samsung Electronics Co., 30 days to pay the fines.
Samsung must also pay 200,000 Australian dollars ($140,000) in fees from the Australian Competition and Consumer Commission, the consumer watchdog that launched an investigation into the phones four years ago.
Samsung has admitted to making false and misleading statements in nine advertisements between 2016 and 2018 regarding the water resistance of seven Galaxy smartphone models. These are the S7, S7 Edge, A5 (2017), A7 (2017), S8, S8 Plus and Note 8.
Samsung and the commission also accepted the sanctions imposed.
The misleading advertisements promoted the phones’ water resistance and suitability for use in swimming pools and seawater. But the charging ports could be damaged and stop working if the phones were charged then that the ports were still damp.
Samsung said the charging port issue only affected the seven models identified in the case that were launched between 2016 and 2017.
“The issue does not arise for current Samsung phones,” a Samsung statement said.
Samsung has sold 3.1 million vulnerable phones in Australia, but the court could not determine how many customers found faults in their charging ports.
An unknown number of customers have had their ports replaced by authorized Samsung repairers. Some repairers did the work for free while others charged between A$180 ($126) and A$245 ($171), the court heard.
Murphy said customers were right to assume that a big company like Samsung wouldn’t announce that its Galaxy phones were safe to submerge in water if they couldn’t.
“A large number of consumers likely saw the offending advertisements, and a significant number of those who did likely purchased one of the Galaxy phones,” Murphy said in his judgment.
Commission President Gina Cass-Gottlieb said her investigation had received hundreds of complaints from phone owners.
“They experienced issues with their Galaxy phones after they were exposed to water, and in many cases they reported that their Galaxy phones stopped working completely,” Cass-Gottlieb said in a statement. .
The judge said the penalty exceeded Samsung’s profits over the misleading advertising campaign.
Samsung’s lawyers initially denied that the ads were misleading and that the phones could be damaged by submersion in water, the judge heard.
“I don’t think Samsung Australia deserves much credit for their cooperation,” Murphy said.
Samsung said it cooperated with the commission’s investigations, which originally included more than 600 advertisements and 15 Galaxy phone models.
“Samsung strives to provide the best possible experience for all of our customers and we regret that a small number of our Galaxy users have experienced an issue with their device regarding this,” Samsung said.
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