Samsung Obtains Major Victory in Administrative Litigation on Planned Obsolescence

Cleary Gottlieb represented Samsung in a judgment rendered on June 19, 2023, in which the Italian Administrative Supreme Court (Council of State) annulled a decision of the Italian Competition Authority (ICA) that, in 2018, had fined Samsung for conduct involving planned obsolescence of Note 4 smartphones in violation of the ban on unfair practices.

According to the ICA, Samsung had released a software update of the operating system installed on the Note 4s, which allegedly caused failures, in order to induce consumers to replace them with newer Samsung smartphone models.

By upholding Samsung’s defenses, the Council of State found that the ICA had not carried out any technical assessment (with the help of technical experts, if necessary) and in any case had not demonstrated that the release of the update of the operating system (which was developed by a company different from Samsung) had actually caused failures in the Note 4s. The Council of State also found that the ICA had failed to consider that the vast majority of Note 4s had never experienced any failures. Finally, the Council of State emphasized the fact that the ICA had not omitted to verify, in cooperation with the EU Consumer Protection Cooperation Network, the consequences of the software update release on Note 4s sold outside Italy, despite the fact that the Note 4s had been sold by Samsung on a global scale.

The judgment points out the ICA’s obligation to conduct thorough investigations and, at the same time, confirms the need for strengthened enforcement action to protect consumers at the European level to meet the challenges raised by globalization.