Australia's consumer regulators said on Thursday, July 4th it had filed a lawsuit against South Korea's Samsung Electronics, accusing it of misleading consumers by promoting its Galaxy phones as water-resistant, Reuters has reported.
The lawsuit centres on more than 300 ads in which Samsung introduced its Galaxy phones as being used underwater in swimming pools and at sea. If the lawsuit is won, it may result in fines of millions of dollars,
Samsung, the world's largest maker of smartphones, has not tested enough to see the actual effects of water on its phones, the Australian Competition and Consumer Commission said.
"The committee says Samsung's ads have given a false impression and misleading that Galaxy phones can be used in all kinds of water ... while that is not the case," committee chairman Rod Simms said in a statement.
Samsung said on its website that it adheres to its advertisements and that it complies with Australian law and will defend itself in the case.
The case is another blow to the electronics giant, whose image was shaken in 2016 when its Galaxy Note-7 phones were withdrawn from the market after they were found to be vulnerable to combustion, in a costly move.
The Australian Competition and Consumer Commission said phones had been damaged when they hit the water and Samsung had rejected compensation/replacement requests under letters of guarantee, which the company denied.
The committee added that Samsung's advice to some Galaxy users not to use these phones on the beaches or swimming pools showed that the company considers that the water may cause damage.
"Samsung introduced the Galaxy phone and is used in situations where it should not be, in order to attract consumers," Sims said. "We believe that Samsung's ads have deprived consumers of choice based on information and gave Samsung an unfair competitive advantage."
The commission says violations of the law have occurred in more than 300 declarations. If so, each violation after September 1st, 2018, may result in a fine of up to $10 million (US $ 7 million), representing 10% of annual revenue.
Violations that occurred prior to that date may result in fines of up to $1.1 million.