Samsung Faces Fines Over Past Updates For Galaxy Note 4

Italy's anti-trust agency - L'Autorità Garante della Concorrenza e del Mercato (AGCM) - has leveled new fines against Samsung after concluding that it has been knowingly causing malfunctions with software updates to older devices in order to get more money from consumers. Specifically, the officials behind the decision determined that Android Marshmallow updates delivered by the company to its Galaxy Note 4 handsets caused too much strain on the hardware. The update had been designed to work with the Samsung Galaxy Note 7, the agency says, and resulted in severe malfunctions. That ultimately force users to choose between either upgrading to a newer device or paying for expensive off-warranty repairs. As a result of the findings, Samsung has been hit with the highest possible sanctions from the agency, with fines set at just over $5.487 million.

Background: As might be guessed from the devices cited by the AGCM, the investigation in question actually stems from Samsung's conduct back in 2016. The Samsung Galaxy Note 5 had been launched in 2014 while the Galaxy Note 7 was made available later on in 2016. Setting aside the stark irony in the fact that the phablet went on to have severe battery issues and catch fire shortly after launch, the company was effectively accused of designing its phone with plans to deliberately make them obsolete. Specifically, the agency was investigating claims that Samsung should have known or actually did know, in advance, that its OEM-tweaked update to Android OS would cause problems with the hardware on the older flagship phablet. That was based on suggestions from consumer reports, among other things, and the investigation itself actually started back in January of this year.

However, Samsung didn't stand alone against those types of allegations. The investigation also included claims against Apple for deliberately slowing down its devices or causing excessive battery drain in order to push users to buy new iPhones. Additionally, the company is said to have left customers ill-equipped to deal with the problems, failing to inform them of proper care and maintenance for their devices and batteries. Apple has been hit with a fine of just over $11.37 million. Similar cases have been leveled against other companies with some frequency over the past year, primarily under the umbrella of protecting consumers from anti-consumer or anti-competitive practices. That has included several cases against Google, with allegations ranging from its handling of user data to its history of forcing its own applications and services onto Android handsets through OEM agreements and certification programs.

Impact: Bearing that in mind, Samsung did come forward in 2017 to assert that it doesn't actively try to hinder older devices and doesn't need to in order to sell new ones. Whether or not that is true of the company now, the investigation seems to indicate that it was a tactic taken by the company in previous years. Whatever the case, the fine here is unlikely to have much impact on the overall value of the company but could, at very least, offer some motivation for smaller handset manufacturers to avoid shady practices.

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