Samsung agrees to be fined $9.8 million for misleading smartphone consumers

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Samsung has been sanctioned by Australia for misleading consumers about the water resistance of its Galaxy smartphones.
Australian Federal Court Brendan Murphy has ordered Samsung Electronics Australia to pay 14 million Australian dollars ($9.8 million) within 30 days and an additional AU$200,000 ($140,000) for costs incurred by the Australian Competition and Consumer Commission, which marked the start of the research four years ago.
Samsung is not contesting the claim and has agreed to pay the fine. The company allegedly made false claims in nine advertisements about the water resistance of seven Galaxy phones between 2016 and 2018, including the S7, S7 Edge, A5 (2017), A7 (2017), S8, S8 Plus and Note 8, reports ABC news.

The ads said the phones could be used in swimming pools and seawater, but in reality they weren’t as water resistant, and charging them wet could damage the charging ports.

About 3.1 million units of the vulnerable smartphones were sold in Australia, including some that best phones of the time, but it is not clear how many customers have damaged their charging ports. Commission chair Gina Cass-Gottlieb said her team had received hundreds of complaints from disgruntled owners. In some cases, the phones stopped working at all.

An unknown number of affected customers went to Samsung for repair. While some did it for free, others had to pay between AU$180 ($126) and AU$245 ($171) to get the job done, the court ruled.

Samsung said the issue only affected the seven models released between 2016 and 2017 and does not affect current phones. The company’s lawyers had initially denied that the company had misled consumers and that the handsets could be damaged by immersion in water.

The fine imposed exceeded Samsung’s profits during the time those ads were running.

Judge Murphy called on Samsung not to cooperate with the investigation, but Samsung denies that. The survey initially included 15 smartphone models and more than 600 advertisements.

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