Samsung has threatened retailers and distributors over the sale of box broken European stock.
The manufacturer sent letters to a number of UK retailers and distributors before Christmas, informing them that it would not honour warranties on Samsung handsets, which had been bought inside the EU and then modified for UK sale.
The move is viewed by many in the industry as an effort by Samsung to exercise more control over its UK stock. Samsung has steadily reduced the number of distributors it works with in the UK since mobile VP Conor Pierce took charge a year ago.
However, Samsung’s ability to refuse warranties on European stock is a point of contention. European law dictates that as long as the product is bought within the EU it can be sold within any other country within the Union.
Intellectual property law specialist Robert Lands, head of IP and commercial at legal firm Robert Kennedy, explained the restrictions to Mobile: ‘Manufacturers like to control the channels of distribution, but are constrained by EU laws. They can’t prejudice people who have lawfully bought the goods in Europe because that would be anti-competitive.
‘If the goods have been purchased within the UK there’s often nothing the manufacturer can do about them being resold in another EU country. The manufacturer’s rights are said to have been “exhausted” after the first sale. The facts of individual cases vary, and it may be that there are steps a manufacturer can take to influence how products are resold – for instance to ensure that consumers are not being misled – but as a general rule you cannot prevent goods being resold which have been lawfully put on the market within the EU.’
One argument made by Samsung has been that the products have been sold as ‘new’ but can’t be classed as such because the seal on the box has been broken. However, in most retail outlets in the UK the seal is broken during the customer set-up process, making it unclear how exactly the customer is being mis-sold.
Explaining the reasons behind its threat not to honour warranties on modified EU stock, a spokesperson for Samsung told Mobile it was part of an effort to protect ‘consumer experience’: ‘This is not a question of Samsung preventing the sale of imports from within Europe; Samsung has no issue with imported devices being sold where the devices and their packaging have not been modified, and Samsung provides a warranty service for these products.
‘Consumer experience is of primary importance to Samsung. We are therefore taking action against distributors that open boxes, change the official software on devices, replace genuine chargers with non-genuine or fake chargers, and remove the network lock on devices.
‘Sometimes these devices have been falsely sold to consumers as “new” devices. If unauthorised changes have been made to the device and packaging, Samsung is unable to offer a warranty and may not be able to offer over-the-air security updates. We would therefore encourage consumers not to purchase any devices that have been modified in this way.’