Samsung fined $340K in Taiwan for smearing rivals

Summary:The Taiwanese unit of Samsung Electronics was fined for a smear campaign against rivals on local online forums including hiring bloggers to mislead consumers.

In Taiwan, a fine of NT$10 million (US$340,000) has been slapped on Samsung Electronics for giving consumers misleading impressions on products belonging to Samsung and its competitors, including Taiwanese mobile phone giant HTC.

Taiwan's Fair Trade Commission (FTC) said Samsung Taiwan's smear campaign, carried out by part-time bloggers disguised as consumers praising Samsung and denouncing its rivals on local online forums, violates fair trade rules in Taiwan. 

Two marketing companies contracted with Samsung Taiwan from 2007 to 2012, OpenTide Taiwan and Sales and Profit International, arranged part-time bloggers to post comments in favor of Samsung mobile phones. Both firms wered fined NT$3 million (US$102,000) and NT$50,000 (US$1,700) respectively, by the commission.

According to the commission, the activity violates Article 24 of Taiwan's 2010 Fair Trade Act. The article stipulates: "In addition to what is provided for in this Law, no enterprise shall otherwise have any deceptive or obviously unfair conduct that is able to affect trading order".

Commission officials said, in accordance with the Fair Trade Act, Samsung was entitled to file an administrative appeal within one month of receiving its disciplinary citation, a process likely to take up to six months before a final ruling is delivered.

Samsung Taiwan has expressed deep regret over the commission’s decision, saying it adheres to transparent and honest communications with consumers. "Samsung Taiwan will carefully examine the FTC's decision and take appropriate action to protect our company's reputation and express our respect for consumers," the South Korean firm told the state-run Central News Agency (CNA).

According to the CNA report, the allegations came to light after Internet users in Taiwan disclosed in April that Samsung Taiwan had hired students to write articles spreading negative comments on HTC products and recommending Samsung phones instead.

Samsung adopted a similar strategy to promote other products. In January, Samsung Taiwan received a fine of NT$300,000 (US$10,200) by the commission for misleading advertising about the camera functions on its Galaxy Y Duos GT-S6102 phone, the CNA report noted.

Topics: Legal, HTC, Samsung, Smartphones

About

Based in Taipei, Chiu Yu-Tzu has been a journalist covering Asia's tech hardware hub Taiwan since mid-1990s. Currently, she contributes news reports about policies, technology industry, R&D updates, among others, to New York-based IEEE Spectrum, Washington D.C.-based Bloomberg BNA, and other media outlets.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.